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I do understand. It is you that choose to ignore the facts. You have taken Buffett's statement out of context, but that's okay. I've posted facts. You seem to think ignoring facts will somehow change it. What I wrote in the other thread, also applies here, so I'll just cut and paste it so I don’t need to write it again. If you don’t agree with these facts, then factually refute it and prove me wrong. Your opinions do not change the facts.
USA is a military superpower, but I don’t think you can truly make the argument that it is an economic superpower anymore. Read “Running on Empty” so you have a better idea what confronts US now, and in the future.
Debts are going to $9 trillion, as Congress just increased the debt ceiling. Based on 2005 US OMB revenues of just over $2 trillion, that’s over 400% of current revenues. Some people unknowingly post the GDP numbers, but GDP is a measure of productivity, not revenues. USA pays its bills, using tax revenues, and borrowed money, incurring more debts. It needs to borrow over $2 billion dollars a day, just to keep the government running.
You are correct that Reagan also had a huge deficit, but the circumstances are very different now during Bush’s tenure. During Reagan’s tenure, we didn’t have record high debts(debts existed then, but not at current record levels and continues to go up). We were not nearly as dependent on foreign financing, didn’t face nearly the level of competition from the global economy. We had a bounty from recycling petrodollars and could print dollars without consequences since there were global demands for US dollars to facilitate oil transactions, with no real viable alternative currencies to rival the US dollar. This was also the time when Central Bankers around the world didn’t truly realize they have collective financial leverage.
But those days are long gone. Today, US have record high debts, and high dependence on foreign financing resulting in dwindling financial leverage around the world, as Central Bankers not only realize they have collective financial leverage, but have exercised it too! Our dependence on foreign financing has an inverse relationship to our financial leverage around the world. Any doubts, ask Snow, Greenspan and Bush what exactly did they get of substance for their trip to China? Because of the inflated cost of living and higher labor cost in the US, it cannot compete as effectively in a global economy, as industries after industries are not only impacted by outsourcing, but some industries are essentially gone (domestic TV and computer manufacturers). Petrodollar recycling will reduce as countries like Iran go to a bourse and others use barter agreements to circumvent the need for dollars. Lastly, a united Europe, with its Euro, is a formidable currency alternative that not only reduce overall demand for the dollar, but more importantly, gives Central Bankers around the world a viable currency alternative and shape many future policies to come. Around the horizon, don’t be surprised to see an Asian currency reserve, with even an AU, based on the ASEAN APEC platform.
The high cost to cope with terrorism is also exacerbating the US economic attrition, just like how bin Laden planned. He understood he could not defeat the US militarily, so his plan was win by economic attrition. There is historical precedence since he helped Afghanistan outlast the Soviet occupation. The Soviets collapsed partly because of this long costly occupation in Afghanistan.