It appears to me that you are jumping to conclusions by mentioning “it Could’ve Been Lots Worse”. I believe that is past tense and from quick glimpse, you failed to mention two (2) very critical points.

(1) What about the amount of derivative financing that has yet to be felt in the Credit market when the Corporate world starts to feel the shakeout of all of this. Do you really believe the $700 bn bailout is all that was needed? One of the chief cohorts named Ben Bernanke has already approached Congress in the normal cowardly fashion by strongly HINTING to additional funds that will be necessary and that the market will take time to recover. That is a frame up!!! When the true impact of this starts hitting the Corporate world that Ohhhh Bama says he wants to tax and share wealth from … either one in itself will produce reason # 2 for supporting the view that we are just entering into the 3rd inning of this game.

(2) When corporations feel the sting and are looking at facing cuts in order to afford losses and / or additional taxes / forced health care, they will be faced to reduce their workforce. The last time I checked, that actually increases unemployment numbers which in turn SLIGHTLY impacts the already concerning economic woes that “could have been a lot worse”.

Then again, maybe I have perceived something I should not have, because this “Could’ve been a lot worse”, had it not been for the fact that the enemy to this entire situation is also our strongest ally. True Americans are those who do not believe lies, although “unfortunately are sometimes deceived by some whom they at times are required to place their trust in.” That would be more of an issue of corrupt behavior than that of believing a lie. Truth is, Americans have been lied to and swindled to for too long and their is an awakening.

I agree with another comment on Term Limits. What is wrong with 1 (6 year term) across the board? In and out – One term only and rebase our economy off of a new currency and phase out fractional reserve lending that is encouraged by the Federal Reserve who holds our country hostage. Yes, the Federal Reserve, synonymous with JP Morgan- Chase, Morgan Stanley, BIC, World Bank, David Rockefeller, International Committee on Foreign Affairs etc. etc. etc. …. We can, should and owe it to ourselves to stand up for Liberty and call a spade a spade and quit trying to fool ourselves into believing we have escaped the grasp of “The Sequel to the Great Depression”. It is nearer than we think if we believe this mess we are in is less than what it really is. I firmly believe that is likened to predicting either Tampa Bay or Philadelphia to win the series in 3 games.

Actually, now that we are talking baseball, I’ll take Philly in 2.

There is more, but I’ll stop here.

Respectfully,

You make your case well but you didn’t address a few very important considerations.

You are correct when you say that the current account deficit is 5% of GDP and will have to be eliminated, or nearly so. That, however, seems a very optimistic assumption on your part. How do you think that might occur? And over what time period? The drop in oil prices will definitely help but the dollar has soared against the euro and now our exports there are nearly 20% more expensive than they were a month ago. With Europe and the rest of the world entering a recession, how much demand will there be for our exports? Further, all these countries entering recession are going to do whatever they can to keep their economies strong. They need to export to the U.S. to keep their citizens employed. These countries will subsidize their exports, peg their currencies, reduce profit margins, accept reasonable losses – anything to keep their citizens employed. Expect modest improvement but nothing significant unless the recession is very severe.

Then of course, there are the twin deficits. Next year’s Federal budget deficit may reach $1 trillion dollars. Does that matter in the scheme of things? Does it matter that every man, woman and child owes over $30000 because of the budget deficit and at least another $17000 because of the current account deficit? Do you realize how much those obligations would soar with a 2%-3% increase in interest rates? Do you think our foreign creditors are going to be happy with the U.S. taking on all this debt?

And what happens when all of our foreign creditors realize one day that no matter what they sell us and what the terms are, the only thing they are going to get from us is more IOUs?

There’s alot that can still go wrong?

t

How on earth will the US payments deficit to foreign countries, which is now around 750 billion per annum, be eliminated or even reduced? Already, foreign exporters don’t want to continue pumping goods into the US without payment in return.

Furthermore, and most ominously, foreign suppliers to the US, or to anyone else, can’t afford US dollar valuation of their stuff for sale. US dollar valuation prices are too low and going lower and lower, still. Even on home turf, there is a total US dollar wealth wipeout of some 20 trillion dollars. So US dollar valuation everywhere continues to be watered down.

Suppliers, therefore, of critically needed commodities like oil, demand “new price” tags on their goods, which will give them the kind of value they both, need, and want. So, probably sooner, rather than later, suppliers will disconnect from the US dollar altogether, in favor of some “other” valuation device.

Norman Prevatte