Land Of The "Free-Money"- Home Of The Broke

(SEATTLE) 11/30/04 - Years from now, historians will struggle to explain how so many trusted US institutions fell so quickly with the dawn of the 21st century, and the election of Mr. Bush. A series of Wall Street scandals--running for years--marked the start of a dizzying sequence of what might have been a wakeup call to the American public. Next, in short order, came major failures of US intelligence and governance at the highest level, leading to an attack on US soil, followed by a largely unfounded (and expensive) attack against Iraq. And then to top it off, record deficit spending by the American administration, even as the American public was strung along by a series of false promises--for stocks, for pensions, for wars, for the FDA, even for elections (what's left?). Indeed, the promises made within America seemed to fall just as exports and jobs bearing the “Made in America” label tumbled.

So historians will probably find little surprise in what happened next, as the few remaining items bearing “made in America” were brought into question, and fell to the wayside. That is, faced with historically high producer inflation, rising competition, and collapsing confidence in what was once the “full faith and credit” of the United States, foreigners dumped the US dollar and US Treasury notes, slowly at first, and then more quickly as fears grew that terrorist groups might strike at the financeers of US attacks abroad, rather than the US perpetrators. Historians will ask, “If the Iraq war were so important, why didn’t George Bush issue war bonds…why did he instead give tax breaks to the wealthy, and run the US Treasury dry, taxing Americans for generations to come?”

But there will be no good answer; it will be further noted that Mr. Bush spent the rest of his life “serving” multiple lucrative appointments--on the boards of major oil companies, who didn’t have to lift a finger to rake in trillions due to the Iraq “mistakes” (an amount, number crunchers will muse, which curiously mirrors the trillions raked OUT of the US Treasury).

Indeed, some future accountant may ponder why the wrenching adjustment to US finances took so long. A gaping US trade deficit, a budget deficit with no end in sight, and a mammoth federal deficit--not to mention, trillions of dollars in (ahem) “guaranteed” but “off balance sheet” US mortgage debt liability--did in fact finally open jaws wide enough to chomp into the perception of the published “triple A” credit rating of the US.

Sadly, future financial poets might reflect, what was once the “land of the free” became the “land of the free money” which rapidly transformed the “home of the brave” into the “home of the broke”--and left more than a few faithful creditors feeling anything but "full."

ENDS

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