More here and here. Essentially he is saying that the current financial crisis, together with the dollar loosing its fiat-currency role when falling into hyperinflation and not least the mountain of foreign debt the US have accumulated, will result in the collapse and breakup of the US. I halfway agree with him. The US ecenomy will tank soon, which will lead to massive social-unrest. But I think the US fragmenting into many parts is not all that realistic. Perhaps a looser federation will emerge, with more state-autonomy and less power gathered in Washington DC.
"Washington DC is not America. It has become an alien city-state that rules America, and much of the rest of the world, in the way that Rome ruled the Roman Empire."-Richard Marbury You know Zylark, Sweden saw a huge increase in unemployment and there problems while they made a transition to social democracy. Could this be an obvious correlation between what America is witnessing and what Sweden witnessed during the early 90's? That dude is a Utopian theorist, and let me explain simply. That general overview is the stupidest thing I have ever heard, and anyone that has never been to America would make. I suggest reading. I know personally the man who wrote the section about my state, FL, and must say it embodies everything about my state. Igor is just moronic in his views, what will happen to the US organizations that have been doing business with China? That have built up those reserves they have now. Will they just cease to exist? A reserve money supply amount to shit unless you actually do something with it, what will happen when the people actually call for a social revolution there, all that wealth will amount to shit when you actually got to give a pension and governmental services like the western world. As for Russia being the world regulator, I think it's transition created to many institutional problems which Russia will be trying to deal with to this day and will continuing to deal with. At this point it is not a good regulator of itself let alone other worlds economies.
Yeah, I don't think the US will break up. But there will be massive social unrest as the economy continue to collapse, and that will mean government using troops to keep a very angry populace at bay. Flashes of war like rioting will spread through all major US cities as peoples savings and pensions vanish into thin air and consumer goods and commodeties prices go through the roof and the dollar sink into hyperinflation. That will force through a much needed change of government paradigm. As such the collapse is a good thing, because it replaces the current pyramid-scheme that is US financial institutions and foreign trade vs domestic industrial policies. Replacing the wishfull thinking insanity of the current system of making money by printing money, with a system based on rational ideas of making money by making products. Loved the quote of Marbury BTW
The original intent of the United States was to have 50 competing, loosely cooperating, mostly sovereign governments. If we can get near to that point again, I will be overjoyed.
I really doubt even have the shit you mentioned will happen but ok. America needs to change, it is obvious.
It is already happening. The US is already broke, it is just inertia in the system that still keep the entire structure standing for the time being. Inflation is at 10% already. Unemployment is nearing 15%. Housing values have halfed if not more. Credit are essentially shut off. The US dollar is near halfed in value from just 8 years ago. The US is a leech on the world-economy, a burden, and the will to continue lending you money are vanishing. It is not for fun that the EU, Russia and China are positioning themselves for the coming shift in the world economy. Scurrying to use their dollar reserves to buy (US) assets before the dollar looses value entirely. Russia already demand payment in rubles for their NLG exports with key partners. What have happened over the last 8 years, is that the rest of the world have been subsidizing US consumption, and it is coming to a very abrubt stop. For the simple reason that using money to consume rather than invest in income generating industry, is like throwing money into a fire. It keeps the fire burning, but it will not make you able to repay the debt. Imagine if five chinese and an american was stranded on an island. The chinese use their time to grow pineapples and wheat and make tools and such. The american on the other hand, writes IOUs to the chinese to get access to those products. But the american do not use that food and tools to make his own production so he can contribute and make good on the IOUs and trade with the chinese, but use it to pimp out his straw-hut living a lazy life mooching off the hard work of the chinese. It is not sustainable, and will not work once the american start defaulting on previous IOUs. It will come to a screeching halt, and eventually the american on that island will die of starvation.
First off, we've had this thread before. Secondly was the intention of the articles of confederation, which FAILED.
Zylark, The fact that you are equating the American economy to a bunch of IOU's is appalling. I would love to see where you get this information, I mean I look up our average unemployment rate since NOV 08 and I see a rate of 6.7%, which contradicts your 15%. Are we talking about a different America? In Sweden in the early 1990's saw way worse condition than what the US is seeing now, did the world economies shut them out and cast them out as a "Burden". I think you are over dramatizing what is really wrong here.
Notice he says 'near', and also notice the system of government never 'FAILED' it was politically destroyed by the powerful in seek of more power. The "Anti-federalist" letter at the end of the Philadelphia Congress: I think it can be agreed that they are correct, as are the many other people who predicted the exact outcome of the transformation. From 'Centinals' letters to Independent Gazateer 1787: I too would be overjoyed with something near the power states had under the Articles of Confederation.
The best way I´ve heard it been compared to an island type situation is: there is an island inhabited by a fat guy (U.S.) and, let´s say, five skinny guys (Asia or whatever) and the job of the skinny guys is to hunt, fish and cook meals for the fat guy. When the fat guy finishes he leaves enough crumbs for the skinnier guys to keep on living and doing their jobs. If they fat guy didn´t exist the others could work less, have leisure time and eventually have major progress (leisure time leads to ideas leads to progress). But the way the island works right now is too much of an opportuniy cost (not sure how to say it in english), and the fat guy must go. I´m sure most people here have heard this, it was in a youtube video someone posted the other day, and I´ve heard this example for other things as well.
No, it is the truth. You have very little industry, since you've outsourced it all. All you really are exporting, is weapons, niche technology products and dollars. Especially dollars. No, your government lies to you. In the 1990's various statistical polling standards was revized to hide the real inflation and unemployment numbers. Using standards from the 80's and earlier, inflation is at approx. 10%, wheras your government with the new standards, are telling you inflation is at a meager 1.5%. With a stroke, Clinton removed the homeless and those giving up seeking for work from the unemployment statistics. Now they just represent active work-seekers and people on various unemployment benefits. The numbers do not represent the real unemployment number. Again, using standards from before reform of the statistical polling by the government, unemployment is actually 16.5% and rising rapidly. The government however lies to you, telling it is just north of 6%. Your government tells you your economy is still growing by some 0.5%, where in reality it is shrinking at near 4% Graphs and data and whathaveyounot here. No, but they did not lend them more money until they overhauled their economy, cut drastically in spending and made incentives to grow industry. Which eventually led to a great shift in Swedish policies as they decided their best option to get out of their crisis was to join a larger economy. So they joined the EU in, um, 92 I think. If anything, I'm understating the economic suicide the US have performed by its crazy outsourcing policies. Read up on the Weimar republic, and count the parallels.
Your argument is an argument against capitalism and less than one against the United States in general IMO. I think that is why most countries like Europe in general find it odd why America is so willing to vote politicians that hold conservative economic practices to an extent. It is an over dramatization of what is really at fault here, the US will adapt, we have before and we will again, maybe not in the best interest that Chile or Norway, but it will be in our best interest indeed.
I´m pretty sure it´s just an argument on opportunity cost and most certainly not against capitalism. I´ve heard it in Micro, Macro and basic economics to address other issues, but it fits this one as well. http://en.wikipedia.org/wiki/Opportunity_cost I´m sure the U.S. will adapt, that´s one of the things I envy about your system in comparison to our own, the flexibility of it all and the ability to adapt. Chile was the country that suffered the most during the Great Depression, stupid dependency on salt peter, and most of it was because it didn´t have a flexible, or even sound, economic/fiscal policy. I hope the one we have now works better than the one back in the 30s.
Aaronman, the Confederacy was failing. The individual governors of the states had too much difficulty leveling armies to fight the red coats. The intrest of the few overwhelmed the intrest of the few, which was the entire reason to draft the constitution and the federalist government. I don't think the framers had any idea what would grow out of that, but they most definatly intended to dismantle the confederacy.
Well there has been a drastic social change in the election of a new black man, who plans on bringing new changes to our economy with a huge surplus into large scale state expenditures to rescue a morbid economy from destruction. It was 92, and just like the US they saw credit disaster and a mortgage bubble that mirrors the US's, so instead of calling America a leach just say they are in needing of some change. http://en.wikipedia.org/wiki/Economy_of_Sweden#Crisis_of_the_1990s I am not going to try to disprove propaganda my country spews out. It is very true these things, but wouldn't it point out if you actually locked at the graph in the long term that it has not changed drastically. The rates stay the same over time, so the 6% or 16% is just useless numbers when it comes down to it about unemployment. What matters is the drastic increase, which we can all agree with. I really could care less if your source said 25%, the fact that the rates never changed is what is important to point out.
opportunity cost was the whole reason why Marxism/capitalism came about, I think it is an argument against capitalism indeed. The US is good at being capitalist, and I think that is why the US is called a Leech/Fatman. The US is a predator with it's corporations, and indeed it is a leech and a fatman, being that a predator is feeding off of other organisms to do the work of transferring sunlight to energy. The predator can only be sustained when the plants and animals it feeds off of are doing well, the US is dependent of course in this way off of other societies to garner it's wealth. That is why Zylark will bust his argument down to the US economy is fledgling because of outsourcing, which is not true.
I guess I´ll just have to disagree with you. The U.S. would be the leech cause it consumes much more than it produces. A good capitalist wouldn´t be a leech in my opinion, a good capitalist would contribute greatly to the system. Maybe it was too simple an analogy to explain such a complex scenario. But don´t you think that if the U.S. started living within their means, they would start fixing their economic situation? I don´t get how opportunity cost was the whole reason Marxism came about though.
Outsourcing is the underlying problem. You have de-industrialized your country. Wealth and prosperity can not be kept up by borrowing money, or get so delusional that one think the rest of the world will give you money out of generousity so that you can keep up a lifestyle. Though I am sure the US will make the necessary changes to reindustrialize and invest in needed infrastructure, it will be a very long haul, decades, and in the short term it will be very, very, painfull. As I've said, it is already happening, unraveling. On the bright side, you did not elect McCain to navigate you through this mess. On the other hand, I do not expect Obama to change the system, but rather patch up the existing one with stop-gap measures until it comes crashing down by this time next year. What he'll do then, I do not know. You should have elected Ron Paul
Marx brought up that the idea of supply and demand is flawed, and that value given with a mans work and the cost of the necessities effect his opportunities given to him are how the system works truly. Marx was correct in that idea, but incorrect in many other areas. You see the average wage of an American comparably to a person in Chile are much different, being that the American makes slightly more. OK, well the cost of goods in Chile although are slightly different, are not much different in the broad scope of things than in America, so the American benefits. This is the whole idea of labor and opportunity costs, and what Marx thought of as unfair, which is true. There are other costs that effect a consumers habits than supply and demand, and the consumers habits are what effects the entire economy. There are reasons why people buy high and sell low, even though an economist pulls his hair out thinking why people would in there minds do such horrendous things.