Bush Screws America, Again: Economy Slips to #2

He did it to Arbusto Energy in the '70s, to Spectrum 7 and Harken Energy in the '80s. Enormous debt. Selling his shares to foreigners just days before a negative report on losses, leaving the other shareholders to shoulder the burden.

Now, he's done it to the United States of America. Enormous debt (a $9 trillion turnaround from a $5 trillion projected surplus to a $4 trillion debt), sold to foreigners. Until, that is, the value of the dollar falls to levels that foreigners may prefer other currencies instead -- such as, say, the Euro?

The result?

For the first time since World War II the United States is not the world's #1 economy. We have slipped behind the European Union. (This, according to Erin Burnett on CNBC, Friday, March 14th.)

The European Union? What and where is that? Of course, we all know a "European Union", but that has national healthcare, strong unions, high tax rates on the wealthy, sales' taxes, well-funded pubic transport, free daycare, paid maternity leave..... so there is no chance that this is the same European Union whose economy exceeds the US, because those policies make prosperity impossible.

9/11, Iraq, Katrina, Deficits, Debt, $100+ oil, Afghanistan, Walter Reed (a generously incomplete list!): the European Union would never tolerate the ideology and incompetence of such heritable political power.

What an historical irony, and how tragic for all.

Comments

[JoeBlough]

I wouldn't have a beer with Bush, because he would spill it and make me clean it up. And then kick me while I was on the floor.

[javagirl322]

Nobody is really surprised...our children and their children will pay for the mismanagement of this country for many, many generations. However, there have been so many reports of missing billions that I seriously doubt Bush, Cheney, Rice, Rumsfeld, Wolfowitz, Powell, Bremer and the usual suspects families will ever want for anything...

[RagingJerseyBoy]

Maybe the fact that the European Union has now become the world's largest economy, usurping the U.S, which has held that position at least since World War II, is not such a bad thing after all. I think that America needs a good dose of humility and the powers that be need proof that the American way of doing things is not necessarily the best, that 'socialist' Europe can be as prosperous as the U.S., if not more so. Face it, we are in the waning days of American empire; the eclipse of America's hagiographic superpower status would be happening regardless of who occupies the White House, but the Bush administration's conduct over the past seven years will make this transition more painful and has garnered very little sympathy from most of the world.

[JXB]

The military, the environment, the Constitution, the country's standing and moral authority in the world, the Department of Justice, the nation's readiness to respond to domestic emergencies, etc....the economy stood as the one remaining item not yet broken by the Bush administration. You didn't think he was going to leave office with unfinished business, did you?

[chx]

America, as we know it, *is* at it's end. That's a good thing for most Americans. I know it seems foolish to believe there really can be change this time around, but a look at history (not the kind I learned while living in the US) actually shows that change is the constant.
Reagan was good for the country to some degree. He was like medicine... taken for, metaphorically, 10 days, it can fix certain things. Take it more, it starts to poison you. It's time now for a real change in policy and thinking. Undulation is the way the Universe works, my friends.

[RichLiberal]

You sound like an Obama supporter - with your "change". You want us to "change" our status in the world to a lower level.

This is exactly the kind of "change" Clinton supporters are opposed to. Hillary will bring the kind of "change" the Clintons brought us in 1992-2000 - i.e. the strongest economy the world has ever known.

If you are in a big blue state represented by Democrats and your state voted for Hillary, and you don't want this kind of "change", then call your Representative and make sure that as a SuperDelegate that they are voting for Hillary and not Obama.

[PaulAbrams]

Really?
Then why exactly did Hillary vote FOR the Bankruptcy Bill championed by Wall Street that she now says, "I'm glad it didn't pass"? This bill would make it more difficult for individuals, most importantly those crushed by medical bills, to declare personal bankruptcy.
Do you believe Is this the kind of person who is going to "just say 'no' " to Wall Street? If so, perhaps someone could provide the evidence for that....
While you are at it, Barack voted to ban landmines and cluster (anti-personnel) bombs that share a characteristic that they remain AFTER a conflict has ended. Hillary voted AGAINST the ban. Pray tell, why?

[PADDYWHACK]

Cheney and Bush have Reverse Midas Syndrome,turning our money into garbage.I'm looking at the vapid potus addressing the crisis at this moment,platitudes from an imbecile will really help.One factor not considered is the hostility shown to Europe and indeed the rest of the world when they failed to be taken in on Iraq.A lot of goodwill was destroyed,and London became an alternative center for investment activity,much closer to the centers of growth.People will make investments where they're not likely to be called names.We have become the anti Islam power,the invasion of Iraq was to punish and kill someone for 9/11,even if they had nothing to do with it.They whipped up the mob and any resistance was treason.The public loved the slaughter and the breathless coverage and thought Bush a Caesar.We will pay the price with our jobs and our homes,and I hope the mob enjoys the slaughter then.The same crooks who ran the lies about the war did us the same service on the economy.

[blackrome]

Cut defense spending by 3/4. Problem solved.

[sa]

totally!
why can't we just have a shit load of bombers,
and our nukes. ground forces are over.
ground forces are the new 60.
(whatever that meant).

[Toonadude]

C'mon now -- wouldn't you still like to go have a beer with him?

[raats6662]

No....I hate beer slightly LESS then I hate him!

[MinuteMan]

That's OK---during the Shrub's reign of malfeasance and incompetence the beverage of choice is hard liquor.

[Cathexis]

Hell no. I wouldn't have a beer with Bush even if he was buying. Then again, if he "was buying" that just means that I'll end up having to pay for five beers, down the road, so his wealthy buddies can drink free, now.

[oldpotsmuggler]

The European Union would come in substantially behind The United States of North America if we were ever smart enough to try to merge our economy into prosperity. Mexico would give us the ability to keep manufacturing from going to Asia, and Canada would give us an excellent shot at energy independence.

[dieseldoug]

That just makes way too much sense. Don't presume either country would want us right now!
Who could blame them ... we haven't made contributions proportionate to our consumption of late.

[Herrington]

We're number 2! Rather more smelly than number one but at least its a solid.

[BBackSoon]

But the old "We try harder." does not apply to US at the moment.

[MajorKong]

I literally wept for my country when Bush was re-elected in 2004.
I wish I'd been wrong but I fear I was right.

[itmaybetoolate]

Why do folks want to try and explain this away- "the EU has 500 million people - the EU spends less on military." The point is we have fallen to second place for the first time since WW II. Is it a coincidence that it has happened now - after seven years of bush, a billion + war, and a sub-prime meltdown? This is laid at bush's door folks. His "midas" touch is still intact.

[LeftRight]

Don't you mean a Trillion+ war?

[itmaybetoolate]

Oops, my bad. I guess I couldn't bring myself to write "trillion."

[Paralogos]

As a citizen of both the United States and the European Union, I have distinctly mixed feelings about this report. Readers in the US should keep in mind that the EU, which now includes most of Eastern Europe as well as the historical Western European EU core, has a population of almost 500 million people, against about 300 million in the US. That makes for a pretty large aggregate GDP, even if the GDP per capita is, on the average, lower than that of the US.
But the biggest reason for this statistical blip - which is all it is, for the moment, however troubling the trend for the US - is the insane devaluation of the dollar being perpetrated by the Bush administration. Quarter after quarter, month after month, the Fed keeps cutting interest rates in hopes of keeping investment and speculation alive, staving off the day of reckoning for the financial sector. This has the effect of driving investors and institutions who have the opportunity to do so to exchange dollar investments for higher-yield euro (or sterling) investments, driving down the value of the dollar against those currencies. This is a well known phenomenon, and it's been utterly baffling to me that politicians and the press haven't been talking about it in the current context.

[Aaror]

If we talked about it, we would have to have a national conversation on whether we prefer a depression or inflation. I suspect we would be looking at stagflation even if we chose the latter, but still...
The people in charge of the American Media don't want this sort of conversation because it would depress consumer spending. Far better that we keep interest rates low, encourage the people to ignore the danger as long as possible, and buy as much time as possible for the rich and informed to convert their assets to non-dollar denominated assets before the crash.
To speak otherwise is to be a dangerous agitator against the corperate control of the United States, to be an economic terrorist. You, sir, should report to your local FBI office for your plane trip to Cuba.
All kidding aside, we should be shouting it from the rooftops, but I'm not sure it would matter. It is really too little, too late, and I can only hope that the EU and China can keep the world going while we rebuild the delapidated shack the US has become.

[TheyAllSuck]

1) Technically, its not the Bush administration that is causing the dollar devaluation. Its the Fed Reserve. Of course, invading Iraq and giving away tax breaks to the rich without balancing the books doesn't help matters either.

2) There's not much the gov't or the Fed can do about the situation. They let rampant fraud go during the subprime lending, and everything is tied to housing valuations and the ability of the ARM borrowers not to default. Low rates keeps ARMs from resetting higher, and still make money available to businesses to borrow.

3) Given the choice of the rich (the powers that be) between rampant inflation to asset devaluation, they readily take inflation. Counter-intuitive, but people don't seem to understand the rich will alway be rich, even during a recession. When there's inflation, there's economic activity, and currency devaluation is merely a local problem. They can move their liquidity overseas, the working stiff cannot. Asset depreciation = depression, and the rich doesn't keep their richness in cash, but in property. Also, economic activity comes to a crashing halt, which keeps them from increasing in wealth, and the locals get restless.

4) And why not do it? The American voter is a retard. They don't even realize they're getting totally ripped off by the rich.

[Paralogos]

Yes, I lumped the Fed and the Bush administration together, despite the theoretical independence of the Fed from the Treasury Department, but let's face it, Bernanke was named by Bush because he'd been a Bush advisor and could be trusted to take orders, oops, I mean suggestions, from the same people who, ah, advise Bush.
I tend to agree that there may well be a deliberate choice of inflation over recession. I've been following public affairs in the US and Europe for many years, and usually, whenever there's discussion of lowering interest rates with the aim of stimulating economic activity, there are voices warning about the inflationary effects. If there are any such voices in the US right now, they certainly aren't being covered by the media.
I am *not* arguing that this is the least-bad choice available to US policymakers at this point. It's been clear for years that the financial community, with active support from the Bush administration, and Greenspan and now Bernanke at the Fed, were driving the US economy into the wall at speed, and I don't think there's any magic wand that anyone can wave at this point to make things better. I was just trying to make the point that the US falling behind Europe as an economy is in large measure a function of the increasingly desperate US monetary policy.

[jp5472]

Yes, this has been reported on in CNN's In the Money....just that since it isn't the gossip rag type show that draws the attention of the masses in, hence few know or care to watch...the masses just listen to the sound bite of Georgie spinning it again that "Our economy is robust!" for that 30 second blip, and then bitch and moan at how the price of fuel, food, everything is eating up their discretionary income, even eating into their expense income...while the GWB class laugh at us all and all that they have gotten away with for 7+ years. The Federal Reserve? Bernanke? You'd have to claim you actually have met the Easter bunny and the tooth fairy to believe the Federal Reserve is independent of this administration.

[Over40]

This information is helpful - thank you!

[Londonliberal]

The EU is doing better primarily because it spends far less as a percentage of GDP on what Eisenhower described as "the military-industrial complex"

The billionaire necons who pushed the Bush Administration into the insane war with Iraq and persuaded him to deficit finance it to the detriment of future generations, need to be taught a lesson.

One way might be to raise US Federal Income Tax levels on the most wealthy to postwar levels and by the way 1946-63 the top Federal tax rate was always above 90%. Why should the middle classes pay for the profligacy of a few ?

[BBackSoon]

"Why should the middle classes pay for the profligacy of a few ?"

Because the few OWN the Government.

[SamThornton]

Looks as if the Democratic Congress sadly misunderestimated President Bush's continuing capacity for mischief when they placed impeachment off the table.

I've no doubt we'll have many similar bits of unpleasant news in the days and months ahead, courtesy of both Messrs. Bush and Cheney as well as their enablers, the Pollyanish Ms. Pelosi and the reliably weak-kneed Senator Reed. Difficult to determine which one lacks a brain and which one lacks courage as we troop down their Yellow Brick Road.