BMWlover said:
A good reference epj3! And I want to add my point of view on Bush¡¯s economic policy.
Firstly, the price bubbles of houses and buildings: I heard that the average price of houses and buildings has been increased more than 40% during last 4 years. And interest rates have been almost 0% considering yearly inflations. Consequently, people did a mortgage refinancing and they got some extra money. And this surplus withholds the current U.S. economy. Thus, the demand of houses and construction is the source of current economy, not supply side. That's why Bush administration tries to keep its consumption at a certain level by extra money (tax cut can be understood in a same way).
Secondly, the power of dollar: Iraq was trying to change its oil transaction money from Dollar to Euro. And other OPEC countries were in support of using Euro instead of dollar. What if Euro will be pegged money in oil transaction? The depreciation of dollar will be definitely expected. Then, the weak dollar can affect the flow of capital to US from outside, negatively. This will cause house and construction markets to collapse. And again, if the house and construction demand falls, US economy will surely plummet down.
Bush¡¯s foreign policy can be associated with the domestic and economic policy by above reasons. However, our budget deficit is really critical. The portion of budget deficit out of GDP has incremented over 30% and this is almost a bankrupt situation. By spending money in Iraq and other government issues, the deficit has been fatal. Furthermore, Iraq can be another Vietnam because we don¡¯t have any more money to keep our troops maintaining. We will see how it goes.
I can¡¯t say Bush¡¯s decision was entirely wrong because of above reason. However, I can say the possibility of country bankruptcy is more increased than before, our economic health is much weaker than before, and other countries are less respectful to US than before. What a sad reality¡¦
Firstly, the price bubbles of houses and buildings: I heard that the average price of houses and buildings has been increased more than 40% during last 4 years. And interest rates have been almost 0% considering yearly inflations. Consequently, people did a mortgage refinancing and they got some extra money. And this surplus withholds the current U.S. economy. Thus, the demand of houses and construction is the source of current economy, not supply side. That's why Bush administration tries to keep its consumption at a certain level by extra money (tax cut can be understood in a same way).
Secondly, the power of dollar: Iraq was trying to change its oil transaction money from Dollar to Euro. And other OPEC countries were in support of using Euro instead of dollar. What if Euro will be pegged money in oil transaction? The depreciation of dollar will be definitely expected. Then, the weak dollar can affect the flow of capital to US from outside, negatively. This will cause house and construction markets to collapse. And again, if the house and construction demand falls, US economy will surely plummet down.
Bush¡¯s foreign policy can be associated with the domestic and economic policy by above reasons. However, our budget deficit is really critical. The portion of budget deficit out of GDP has incremented over 30% and this is almost a bankrupt situation. By spending money in Iraq and other government issues, the deficit has been fatal. Furthermore, Iraq can be another Vietnam because we don¡¯t have any more money to keep our troops maintaining. We will see how it goes.
I can¡¯t say Bush¡¯s decision was entirely wrong because of above reason. However, I can say the possibility of country bankruptcy is more increased than before, our economic health is much weaker than before, and other countries are less respectful to US than before. What a sad reality¡¦