World economy: When America sneezes…
One thing about the United States of America should trouble the world at the moment. It’s its economy. Nations worry each
time the American
economy sneezes. Even America’s leaders catch cold. George
Bush Snr was in the White House on one occasion when it did. It was during the last
year of his first term in office. The old man had run to Japan. Help to bolster his economy was what he went in search of in that election year. He soon caught flu himself. He did at the dinner table of the Japanese Prime Minister, unfortunately. News hunters saw it. They reported it. Time and Newsweek magazines showed the picture of a slumping American president. Bush could not save his presidency.
The slumped
president was dismissed with the slumping economy in the 1992 November elections. This year, George Bush Jnr is in the White House and is seeing another economic downturn. Analysts are predicting a recession. But it’s the last year that Bush has to spend in office. He has nothing to panic about. His two full terms would be up by the time elections arrive in November. And so it happens that the American president has not caught cold when his economy’s sneezing this time around; only the rest of the world is.
It had all started out like a play. It looked as if all was well. Predictions were made for a bright 2008. For the US and world economy, that is. Then a US sub-prime mortgage crisis showed up. It put
banks in trouble. Finance institutions began to mouth phrases such as bad loans, bad debts and liar loans. A 500-billion-dollar loss in the US was mentioned. Reports came out concerning how Americans could not meet up with mortgage payments on their houses.
This affected banks. Accusations were made as to how banks did not do things properly on this issue. Horrible pictures of the true state of banks had been kept hidden for long; some say under bank balance sheets. Others alluded to
lack of transparency in transaction processes. There has also been a lack of strict regulation of the system. But the losses have been incurred. The effect on the US economy is not insignificant.
Then there is the rising oil price. About one hundred dollars per barrel it was at one point. Fortune-tellers predicted worse. The same economy carried the load. And there are also the foreign wars. President Bush has always asked for more. The Congress could not do much to tie the string on the purse. Everyone who fears for America’s security is a patriot. Dissenters are traitors. Terrorists need to be fought. It is the position of hawks. Deficit spending has been all that America’s war expenditure amounts to. The economy has been its beast of burden.
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