Smug Git
Arrogance Personified
Registered: Aug 2001
Location: Hilbert Space
Posts: 35658 |
quote: Originally posted by funkyrooster
I will get back to this when I have some time, as I am required elsewhere at the moment. Nevertheless, consider the fact that the US presently spends around 3%GDP on Defence which equates to a budget of a round $360bn. During the mid 80's the figure was around 7%. Imagine what a defence budget of say $500bn dollars could do when the WHOLE of Europe spends $150bn. as for the US economy, the recession is global and likely to affect everyione else, who will therefore themselves be forced to tighten their belts. As for China and its increasing power, this is being monitored but it is unlikely that it will increase by as much as is needed to challenge the US without, ironically, a large degree of US economic aid.
My point was about deficit spending, rather than recession; the US is still repaying the deficit of the 80s, as I understand it. No problem with that, I have a mortgage that is bigger than my annual income by some way and that is OK. The problem is that continual deficit spending isn't supportable, not that there won't be recessions (after all, they are pretty inevitable). How much did the US pay off the deficit when the US economy was healthy in the 90s, though? If, over an economic cycle, there is a remaining net deficit then the deficit accumulates; if it accumulates too fast then disaster will find you sooner or later. Incidentally, the UK at least is not in recession. Yet.
The same arguments actually apply to most countries (one of my bigggest reservations about increased UK financial integration within the EU is about the financial policies of several member nations) and I would also be dubious if they chose to embark on a great program of world domination (and they could certainly increase their military spending to match that of the US, in the same sort of way as the US will, by borrowing it). The danger of this for America is that they might fall, at some future stage, into a severe economic state where servicing their loans hurts their economy a great deal (and the US has never defaulted on its loans and won't, I don't think). You can't fight the tide of financial reality for ever; if the policy is only sustainable through the results of war, then that is obviously dangerous too.
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