2. Terrorism, including bio, chemical and nuclear terrorism
3. Nuclear proliferation
4. Global cooling
5. Hard line ecologists and global warming droids who don't realize they have really found a new religion
5. The decline in honey bees
6. Abortion
7. The decline of the acceptance of Judeo Christian values in the western world
8. Post modernism
9. Mega volcanoes, hurricanes and tsunamis
10. Self loathing and hating liberals
Although good for the US national ego I am not sure it has been good for the US' or the world's economies. And, I don't think it has been good for the US' national security or people.
Why has the dollar been so strong even when there has been a surplus of US dollars floating around in the world economy and there are so many economic problems in the US? One major reason: Almost all people in the world feel that if everything in the world falls apart the last refuge (besides gold) that will be left is the US dollar. That is why the dollar, relative to other currencies, does well during times of serious foreign crisis and less well in times of stability.
There have been serious problems with the strong dollar. One problem is manufacturing being driven out of the US and surplus US dollars floating around the world economy. Japan, China and other Asian countries have built their export driven economies on exports to the US. Besides a strong dollar they have gone out of their way to covertly keep their currencies weak. With a strong dollar, a weak yen and yuan, and an open market the US has been a sitting duck for exports from these countries. That has driven much of the manufacturing out of the US and created a huge amount of US dollars floating around the world economy.
Another problem has been the ability for the US to not suffer any ill short term effects for running budget deficits and a negative balance of payments balance year after year. When other countries do this the county rights itself or goes down the tubes. A great example is Brazil. Brazil ran negative budgets and balance of payments for years and went nowhere. It then got a hold of its budget and balance of payments and has done great for about 10 years.
In the US case so many individuals and countries wanted to put their surplus dollars back into the US, or to hold them, that there was no problem with the Federal government to keep running negative budgets and the dollar didn't crash because of the negative balance of payments. So, there were no economic signals sent to the US that would have forced the country to adopt long term supportable Federal budgets and trade policies.
There is now a concerted effort by many countries to stop using the US as the de facto world trading currency. It is led by China, Russia, Venezuela and Iran. They are doing it for political and economic reasons. As an American there is a part of me that automatically wants to stop this. But the more I think about it the more I think it would be good for the US.
The dollar would fall in value relative to other countries. That will make exports more competitive and imports more expensive. This is bound to bring a lot of manufacturing back to the US, help the economy and the balance of payments.
The dollar would not be nearly as desirous as it is now and this would make it very hard for the Federal government to keep borrowing. There simply won't be that many countries and individuals who would buy the governments debt. I consider this to be a good thing. It will enforce some discipline with the Federal budget that currently does not exist. And, in the long run, this is paramount if the US is to survive as a wealthy and powerful country.
So what is the downside with a dollar no longer one top? I don't really know. It will be bad for our short term national dignity for sure but so what? It also could force the dollar to fall too quickly and destabilize the world and US economy. But I don't see any other downside.
And this is after the Democrats and Obama have spent 787 billion on their so called stimulus package. The Congressional Budget Office reports that only 21 billion of the package has resulted in contracts being let. Other smaller stimulus packages have worked much better. So what is wrong with this one?
The problem with the stimulus package is that it really isn't a stimulus package. It was a package of items the Democrats had wanted for a long time that they dressed up as a stimulus package to get it passed. It is that old "lipstick on a pig" thing again.
Much of the stimulus money is going to "green energy" projects. That money will result in very few jobs for the first year, if not years. And the multiplier effect of the funds allocated for green energy will be minimal.
Another big portion of the money is going for transportation. The Obama Administration and the Congressional Democrats told people the transportation projects would be "shovel ready"... well, in many if not most of the cases those "shovel ready" project's are anything but. Take the "Hot Lanes" projects in Santa Clara County of California. The money is allocated but the California Dept. of Transportation has not approved these projects. And then the contracts will need to get let and the designing completed. It could easily be early 2011 before these "shovel ready" projects get going.
The truth is that infrastructure projects take years to get going in today's regulatory environment. It is not like during the depression. When Roosevelt became president he was able to get the "Blue Ridge Parkway" started, at twelve different location, within 4 months. And they built the Hoover Dam at breakneck speed.
So allot of these stimulus monies are being wasted. Not that we don't need a lot of these projects they will fund, but we need true stimulus projects even more.
If the federal government really wanted to stimulate the economy with infrastructure projects they should have gone about it completely differently. They should have put out money to patch every pothole in the country. And how about every road project in the country under $1,000,000. These are small with few regulatory issues. The feds should also approve 2 or 3 times as many projects as there is money for and then only award the money to the projects that are truly shovel ready on a "first come first serve" basis. The ones that are late would be left out.
And what about tax breaks and tax refunds. Refunds have had a questionable track record in the last 10 years but there is no doubt about target tax breaks. They can work fast.
All and all, Obama and the Congressional Democrats have completely dropped the ball on getting the economy moving again.
