Bush killing US financially - heading for $8 trillion debt, page 3

Pardon my intrusion. If I may offer an entirely different perspective. But first to say that:

The primary issue is not a deficit, or surplus for that matter, but world currency deflation. Allow me to explain my position.

The PNAC doctrine is one of hegemony, world domination, militarily as well as financially. The object militarily we have seen, but the financial aspect takes a bit longer, more than 4 years in fact.

The U.S of A is the strongest economy in the world, which for all intents and purposes can withstand a barrage of assault before it breaks. Such is the gamble, and that gamble is to reduce the debt load due to the cost of financing wars and the foreign investment needed to sustain such cost, and ensure dominance of trade.

The U.S is the largest importer in the world. So much so, that dependency on imports cripples the economy during times of excessive spending, such as in times of war. While many commodities are fixed for trade in USD, the necessities of life are fixed at the export markets currency. This mean for example, that fruits and vegetables are priced based on the currency of the exporting country, not a treaty assigned dollar value, and so the costs to import exceeds consumer spending.

Because of the excessive domestic deficit burden incurred by the U.S, the USD shrinks in value resulting in the foreign debt costing more with the increase in foreign exchange.

But, the opposite of that is the dependence of foreign countries which rely largely on the US for importing its products, such as France, which trades under the Euro. Currently as it stands, France (as an example) has the benefit of exporting many products to the US priced in Euros, which means that importers must pay an ever evaluating cost for same.

In steps the republican ideology of hegemony, the intent of which is to deflate foreign currency by stalling or allowing the imports from American businesses because it is just too expensive to order product. Those economies (e.g. France) stall because they depend on the export. In fact they not only stall they starve. The Euro devalues from want of investment, The USD rises in value eating away the deficits, and the republicans keep this up until the exporters are themselves crippled, so much so that all foreign debt amassed because of FX disappears.

In order for the European Nations to exit depression, OPEC is forced to trade solely in USD, as are they, EU nations, by virtue of the stranglehold on their other export products. The U.S debt is reduced, and (in PNAC's world) never again will the USD be forced into a foreign exchange scenario where the USD is worth less than any currency. The economic hegemony is complete.

However, as with the Bush administration�s miscalculation on the war, so too was their miscalculation on the FX. The EU, three months ago saw through the plan and threatened to devalue the EU currency to stave off the depression they faced.

For every action, there is a reaction, and unfortunately for bush and the PNAC authors, they were just a bit too opttimistic with their plans.

Now that is a different way of looking at it, perhaps this is what some of the other opposers were talking about, too bad they didn't actually say anything. I think it should also be pointed out that the creditors could also have threatened to sell off all their U.S. bond and crash the U.S. dollar if the U.S. persisted in their attempt at economic hegemony. I think that the essential weakness of that plan and U.S. economic stratagy in general is that it ignores the dependence of the importer. Yes, exporters need someone to export too, but the importers need the exporters in a somewhat more urgent way. The E.U. would be short on money, the U.S. would be short on essential goods which would also damage the U.S. economy.