Reply #11: Nice post, N. [View All]

I agree with you: it's hard to know how far down this economy will go before it stabilizes, or moves out of its doldrums. You made a lot of points in your post, I'll try to address just a couple of them.

#1: what is happening with our country? Why did we march into Iraq?Why did Bush appear just a few days ago, rattling his saber and threatening the world that "we've only just begun".

One might wonder: what is wrong with him? Things are pretty good here, aren't they? Answer: no. Some serious things have happened here that the government would rather we didn't figure out. Without doubt, it's the issue of our dependence on foreign oil. Without it, our economy comes to a screeching halt. There is no one input more important for us. Over the decades, our use of oil and our economy have followed a linear trend. Ironically, the more successful we are, the more we put ourselves at risk by using more of a finite resource. As we're using more & more, our dependence increases on foreign oil, which is proving to be very volatile. Policymakers want, more than anything, to have stable access to oil. And the exact opposite has happened: Saudi Arabia is a powder keg ready to explode. Venezuela and Hugo Chavez is giving us the finger and signing contracts with China. Iraq is sliding into a bloody civil war. Usama Bin Laden asked his followers recently to "target" oil refineries and shipping lanes. So we're caught in a Catch-22.

The other problem is oversupply and overproduction. Ever been to a Goodwill store lately? Take a look at the aisles. They are jammed with perfectly beautiful clothes, dresses, sweaters, shoes. Look closely.

They are made of silk, linen, pure hand-knit wool, even designer labels. Hardly worn.The aisle with coats is jammed with practically new down coats & jackets. Management has had to shorten the time that stuff hangs on the racks, because they are flooded with donations and they simply can't handle all the stuff.

We are currently facing a glut of consumer items. The cycle is moving faster and faster. In order to keep our economy running, we need to keep buying, consuming, at an ever-increasing pace. The reason is because we have
(to be continued)




Thomas Malthus: the gloomy economist