Originally Posted by Oldbabe
Since Bush #2 came to power the federal debt has skyrocketed. Now we pay over 400 billion dollars a year interest on the debt. That's a fact which came about because of the choices that Bush and his Republican congress made. The tax cut and increased spending on Wars.
China has just made noises about not accumulating so more dollars. http://news.bbc.co.uk/2/hi/business/4875606.stm
What will happen when they stop buying our treasuries? What will happen when the dollar falls so much that our government can't borrow at a reasonable interest rate?
Some economists predict that the solution to this disaster is 70s style inflation and it is only a decade away.
All this will be a nasty inheritance from the Bush #2 admininistration and his Republican congress.
I voted for Bush II 4 times. The first time was when he ran for Texas gov and I thought he'd be good. After that it was only because the dems put up total losers by comparison and I agree that others will disagree. Much of what Bush II has done is way different from what I would have liked to have seen done. He has clearly demonstrated he does not fit my definition of a conservative.
Oldbabe, you do have some traces of Kool Aid still on your lips. Our budget deficit is at record dollar levels but it is low as a comparison to our GDP. I would like it to be lower but I'd get there by reducing the social spending which might find objections with you and others on this forum.
China will stop selling to us because they don't want any more dollars? Who, pray tell, are they going to sell to? I suspect China will go on a buying binge in the US and the rest of the world with their dollars and Euros ala the Japanese in the 1980s and the mid-east oil countries are doing now. China tried to buy a US oil company that got shot down. They will be back. They won't stop selling to us because we are the largest market on earth.
I tend to agree with your view of "inflation" hitting but I think it will be in the form of "depreciation" of the US dollar similar to what happened to the pound sterling starting in the beginning of the 20th century. That was when the pound was slowly replaced by the dollar as the "world currency." People would feel more comfortable with something else but the Euro has so many structural flaws it isn't ready to take over leadership. Right now, my guess is that there will be a move to a "basket of currency" approach where the dollar will play a role but the Euro, Pound, Yen and Yuan will be larger players.
I would like to see the dem congress fix the problem but I am not encouraged with what I've seen to date. They've demonstrated they want to investigate GW to the end of his term and talk "impeachment." It may sell well to the dem base but it won't "fix" anything. I hear nothing but rhetoric and posturing. There is a clear positioning for the next election when I think the dems will have to put forth a "unique" candidate to lose the White House. The repubs have next to no chance which is why there aren't a lot of stronger candidates coming forth from their quarter.
Bush II will fade into history. He presided over a very strong economy with an emphasis on his second term as did Clinton I. The business cycle has not been repealed but all politicos claim the upside and blame the "other party" for the down years. I don't see a strong "legacy" being established for him (nor do I for Clinton I). Bush II has had some positives but the big story is Iraq. He will ultimately be judged by how Iraq turns out viewed 50 years from now. Right now that doesn't look too good.
BTW -- If Rick Perry (current gov of Texas) is on the repub ballot, I highly recommend voting for some other party. Dem, liber or communist for all I care but he deserves a quiet retirement ASAP. I can't imagine a worse gov for this state. He has already made noise about being "available" for the VP slot and I almost upchucked.