Here's a scary thought - one that I have yet to hear articulated in a meaningful way.
FUD (fear, uncertainty and doubt -- love the term, Greg!) is on the rise. Consider. Last week, we had two very bad days in the market. Between them, the DOW dropped about 950 points. But we had a couple of good (great days in a normal economy!). DOW goes up about 650. So a net loss of 300 points on a massive turbulence.
Now, we enter the new week with the bill pending in the house. House declines to pass the bill. DOW drops 777 points in one days (a record point - not percentage - drop!). Tuesday rolls around. Tuesday we gain around 400 points back. Wednesday, we trade flat (although not without significant dips of over 200 points throughout the day) as we wait for the Senate to handle the bill. Wednesday night, the Senate passes the bill. Thursday, DOW drops another 360 points (with a few minutes left to trade). So, wall street doesn't get what it wants and we lose 777. Wall street gets what it wants and we lose 360.
The really scary thing is that this economic downturn is starting to have worldwide ramifications. The BRIC countries (Brazil, India, Russia and China) are taking a pounding, right alongside of us.
So here's the question: what happens if we don't pass the bail out bill? I'm not talking about should or shouldn't. I'm just asking, what can we expect if we do not pass the bill? Is it reasonable to assume that in such a case, the inter-related nature of the globalized economy will cause other economies to continue to collapse? And if so, in a world environment where global economies are nosediving, do we potentially see a rise in violence and war as countries attempt to seize limited commodities (e.g. oil) by force?
I guess what I'm asking is really this. If we do not pass this bill, is there is a significant chance the we contribute to national security risks by allowing the world economy to crash causing a rise in FUD and destabilization?
Thoughts?
FUD (fear, uncertainty and doubt -- love the term, Greg!) is on the rise. Consider. Last week, we had two very bad days in the market. Between them, the DOW dropped about 950 points. But we had a couple of good (great days in a normal economy!). DOW goes up about 650. So a net loss of 300 points on a massive turbulence.
Now, we enter the new week with the bill pending in the house. House declines to pass the bill. DOW drops 777 points in one days (a record point - not percentage - drop!). Tuesday rolls around. Tuesday we gain around 400 points back. Wednesday, we trade flat (although not without significant dips of over 200 points throughout the day) as we wait for the Senate to handle the bill. Wednesday night, the Senate passes the bill. Thursday, DOW drops another 360 points (with a few minutes left to trade). So, wall street doesn't get what it wants and we lose 777. Wall street gets what it wants and we lose 360.
The really scary thing is that this economic downturn is starting to have worldwide ramifications. The BRIC countries (Brazil, India, Russia and China) are taking a pounding, right alongside of us.
So here's the question: what happens if we don't pass the bail out bill? I'm not talking about should or shouldn't. I'm just asking, what can we expect if we do not pass the bill? Is it reasonable to assume that in such a case, the inter-related nature of the globalized economy will cause other economies to continue to collapse? And if so, in a world environment where global economies are nosediving, do we potentially see a rise in violence and war as countries attempt to seize limited commodities (e.g. oil) by force?
I guess what I'm asking is really this. If we do not pass this bill, is there is a significant chance the we contribute to national security risks by allowing the world economy to crash causing a rise in FUD and destabilization?
Thoughts?
posted by Just a Few Things about Scott ... | 3:07 PM
1 Comments:
I guess it would depend on one's stance of isolationism vs. global politics.
My personal thought is toward isolationism, unless it is deemed a direct (as opposed to indirect) threat to national security.
Stated differently, our continued budget defect and debt is enough of a national security risk, as is. We're going the way of Rome. We literally can't afford (in a fiscal sense) to not take a more isolationist stance.
And this isolationist stance would be significantly easier (or possible) had we started down the path of energy independence some 20+ (or more) years ago.
You raise an interesting question, and it's a real catch-22. It's my view that we need to do a turtle...crawl up in our shell for a bit, cut spending programs left and right, not accept budget deficits (because reality doesn't accept it from any of us), and get out of debt ASAP.
Once we're in surplus land and debt free can we really think about social programs, foreign aid, etc...
It just makes no sense to me at all to be funding fluff programs here and abroad when we're in deficit spending. It's like taking a loan out to tithe.
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