The Sixth Day
Monday, December 01, 2008
  Comment from a Reader...
Here is one comment that came from Eric in response to my last post, along with my comments:

I think your observations are dead on. However, as bad as the situation is on the household debt situation, I fear the more serious problem is the situation our nation is in. Our perpetual creation of dollars through the fed seems akin to a consumer adding more and more credit cards and using promotional balance transfers to roll over an increasing amount of debt. Eventually, the foreign nations who are extending this credit will have to realize that we do not have the ability to repay our debts, and will have to stop lending to us. Could this happen? Why or why not?

I believe you are correct in the way you describe our debt situation as a country. The crazy thing is that foreigners may go on lending to us for a lot longer than anyone can believe. They could stop next year, or it could continue for the next 50 years.
If I can find it, I will post the text of a speech by Congressman Ron Paul in which he makes the argument that foreign countries will accept our IOU's for as long as we are a great military power and that should we fail in that respect, then we will begin to decline as an economic power as well.
The Fed's money creation is a problem and it will have serious consequences at some point. In a week or so, I will describe what one consequence may be and tell you why I believe it is coming sooner than most people believe.
 
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Commentary about all things human; life, the Christian religion, ethics, politics, economics, sociology, art, anything to do with twenty-first century American culture. Perhaps I will inform, perhaps I will anger and frustrate, but I hope always to make you think!

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I grew up in Kansas in the 1950's - 60's. I attended Kansas State (B.S. in Soc. Science) and Washburn Law School (J.D.). My wife and I have been married for over thirty years and are the parents of three grown sons.

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