Friday, February 06, 2009

Is USA in a losing Ponzi scheme ?

Is USA in a losing Ponzi scheme against itself ? Here in Mumbai, India, many people think so.

The situation was put simply today in D.N.A. (personal finance section, p24). Very briefly "The US Government is spending a lot of money and at the same time trying to ensure that people start borrowing again ... This in turn will revive private consumption". DNA thinks "The right thing to do ... would be to reduce spending... and try to get people to pay their debts... But the Government wants early growth ...".

Overall it certainly looks as if USA is in a big Ponzi scheme, read the article above if in doubt. If the USA were a democracy things might be better. But in USA they have a peculiar system which superficially looks democratic but at best needs tweaking.

For years the Republicans have been imposing neo-Reagonomics on Americans. If you do not know what Reaganomics is, ask some well informed piece of trailor-trash in the USA.

USA certainly needs public works done urgently. Dams (I have even blogged on that matter), highways and many other things. This is not political, just fact. The Democrats usually do those things to avert further Depression, Obama seems to be trying this, and that has to be good. So that is good, and things may take a turn for the better, but the strange series of economic cycles America is involved in should stop.

As an outsider, it looks to me as if the USA should become a democracy. The Democrats have so far made only muffled noises about how they will tweak the system but Obama has it in his hands to at least try to do so. I'm not referring to America's present "golliwog politics" which does clearly show signs of improvement with the election of President Obama, but to essential systemic improvements, of which the present depression is a symptom rather than a cause.

Yes, America can 'do it' and lets hope it will. And its most urgent need is not "Mr.Bush's depression" to paraphrase Huey Long, but to at least tweak the system to make it more democratic.

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