We are watching history. The collapse of a great empire is a rare event. To be able to witness it is an honor (most certainly the wrong word) few could claim.
I had thought the nation would be able to survive the presidency of George Bush. I was wrong. Seven years we survived, eight was too much. This once powerful nation is a feeble shell of its former grandeur
The United States can still reduce the whole of the world to radioactive rubble but we cannot liberate a single marketplace. Iraq was a nation the Ottoman Turks easily controlled and even an enfeebled British Empire mastered that land in the 20th century. Yet, a sadistic tinhorn dictator suffering under a global economic embargo was more successful than the powerful US at providing basic services. The world is right to fear our insanity, a madman president can still destroy the world with the touch of a button. But if the mighty US military has failed, in five years, to conquer a pissant collection of feuding warlords there is little in this world we could defeat.
When Alan Greenspan says that the nation's economy is the worst since World War II he means the worst since the Great Depression. The start of WWII marked the end of the Depression and the war years had a booming economy. The seeds of our current economic collapse were planted by the Clinton Administration but they have been fertilized into full fruit by George Bush.
In 1999, Bill Clinton signed into law the repealing the Glass-Steagall Act (note: this is an important link). Glass-Steagall was a Depression era law that believed a stable banking system was vital for a strong nation. By 1999, bankers like Sandy Weill at Citibank were bristling under a law that prohibited them from the kind of wild, cowboy finances that was making Enron such an exciting business. Banks had access to billions of dollars yet they were required to make dull, safe investments. How boring. Weill and his kin were orgasmic over the prospects of what they could do if the shackles were released. Now we know. The above link suggests Hillary Clinton be asked if she supports her husband's repeal of Glass-Steagall? She should.
The US is entering was has been called the Very Great Depression. The safety nets woven by FDR and the New Deal are tattered shreds. The repeal of Glass-Steagall followed by eight years of lax oversight has brought the nation's banking system to the edge of collapse. Bear Stearns is not an anomaly but only the first of what will be several bank failures. The implosion of the dollar is a symptom of the economic crisis and the continued free fall of the dollar will suck more banks and businesses into the abyss. The massive budget deficits the nation has been running means that the government has no flexibility to help. The nation, like the banks, is nearing bankruptcy. I see no willingness by the rest of the world to help us.
Economically, we are in for a rough patch. Understatement, we are in for Hell. Although government statistics will try to hide it, unemployment is skyrocketing and will grow progressively worse. I expect runaway inflation, like Germany in the 1930's, rather than the deflation that roiled the United States during the Great Depression.
If the wrong person is elected president (John McCain), he/she may try nuclear blackmail to force the world's strong economies, China and Europe, to support us. The formula is simple, give us hundreds of billions of Euros, even we won't accept dollars much longer, or the United States will start bombing your cities.
It is a Brave New World we are entering.