Dear Daisy… I do have an optomistic vision of the New America. It will require considerably more cooperation, honesty, and sacrifice than we have shown in the last 60 years…. I am encouraged by the new congress (David Obey), and the fact that the Republican party (which radically ran up the national debt over Regan and the two Bush's terms in office) seems to be permenently out of power for the considerable future….
I think that the only hope of avoiding a big economic meltdown in the U.S. is if the majority of citizens and businesses bite the bullet and INSIST that both the banking/finance industry and the federal government quickly shift to a pay-as-you-go economy where debt accumulation is eliminated.
The Federal Government (the citizens of the United States) must report total debt including Social Security and Medicare in its books, and institute policies to both decrease expenditures and raise taxes to show a budget surplus sufficient to reduce public debt burden over time. (Are Americans willing to give up government services and pay higher taxes?)
The SEC & the FED have to institute credit policies sufficient to reduce the leveraging ratios on private assets. (Are banks and businesses willing to carry higher cash positions instead of leveraging every last dime?)
The general public has to SAVE MONEY and reduce its dependence on debt to fuel its lifestyle. This of course would require their choice of a more frugal lifestyle… (Are Americans willing to drive less in smaller more fuel efficient cars, live in smaller homes, prepare their own food, and do less shopping?)
These are big hurdles for America to surmount if we are to really have a "soft landing". Of course we can ignore the problem and have a "hard landing" where the eventual outcome is the same with considerably more suffering.
