Wednesday - October 31, 2007

Is the Economy about to Tumble? 

Considering that most economic forecasts are about as accurate as weather forecasts, I figure my 2¢ on current economic signals can't be that far off.

Oil has climbed to $95 a barrel. The dollar has fallen to historic lows and gold is at a 28 year high. 

So many things are wrong right now. 

China and India are competing for natural resources, especially oil, that such commodities will continue to rise in price. Yet, what is the U.S., doing as a nation to end our oil dependency? Are we drilling for oil in Alaska, California, or Florida? Are we building nuclear power plants? Of course we aren't. The only thing we are doing, is using corn to make ethanol, which is energy inefficient and causes food prices to rise.

Our trade deficit ran $57.6 billion in August alone this year. $22 billion of that was with China. No nation can continue to send more money overseas than what it takes in.

Additionally, we continue to run deficits at the Federal level and as of 2006, we were paying $406 billion in interest on the national debt each year. In other words, one twentieth of our federal budget goes to paying off the interest on our nation's debt.

The bottom line is that America is living beyond its means and reality is about to hit us square in the face. And neither Republican nor Democrat is up to the task of fixing what is broken.

Author: The Machiavellian
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