Driving off the economic cliff

Articles in the NYT in the last two days demonstrate the inability of the American political culture to respond to its most pressing economic threats: out of control budget and trade deficits and threats to the dollar. Once the international community loses confidence in the dollar, the U.S. and the world economy is at risk.

The first is an article detailing loss of international support for the dollar (“Foreign Interest Appears to Flag As Dollar Falls,” 11.27.04) and the second is an article on Social security “reform” (Vast Borrowing Seen in Altering Social Security,” 11.28.2004) –a plan that needs no reform, as it continues its decades long surplus, and will continue to pay its way through 2042 and could continue indefinitely with minor adjustments. (See links to the Times articles below. [1])

The current drive to destroy Social Security is a remarkable demonstration of the ability of the right wing to advance its agenda in the face of facts and common sense. The current plan, not unlikely to become law within a year, is so bad that a year before the 2004 election, a special commission appointed by President Bush to promote it, gave up in despair.

Now, with another brazenly stolen election behind us, there may be no political force in this country strong enough to impede the momentum driving such plans. The only hope is that the international community will pull out of the dollar quickly enough to demonstrate to public at large that increasing the debt involved in a Social Security privatization scheme is as untenable as it is reckless and irresponsible. Another possibility is that the stock market could crash at a politically sensitive moment.

Such reflections only go to show how much pain will be required to interrupt the plans of the radical extremists running our government who repeatedly demonstrate that they are impervious even to the most immediate economic threats not to mention to the most fundamental needs of their people.


– New York Times
Foreign Interest Appears to Flag as Dollar Falls
November 27, 2004

Investors and analysts are increasingly worried that the last big source of support for the American dollar – heavy buying by foreign central banks – is fading.


– New York Times
Bush’s Social Security Plan Is Said to Require Vast Borrowing
November 28, 2004

The plan for personal accounts could require borrowing from hundreds of billions to trillions of dollars over 10 years.