U.S. will become thirdrate country without more good-paying jobs
Wall Street has securitized risk, not mortgages, by virtue of engaging in unsound business practices, i.e. loading up their portfolios with risky subprime mortgages instead of diversifying and securitizing low-risk mortgages. The Federal Reserve has abdicated its responsibility to fight inflation by lowering interest rates. This will be a tax on the poor, because inflation is likely to be at least 15 percent for food, fuel, electricity and health care over the next year. The cost-of-living adjustments seniors will get will pay for only a fraction of the inflation. Because of the falling dollar caused by rampant inflation in the United States, the $1.2 trillion in U.S. dollars China holds will force China to buy tangible assets like oil, natural gas, coal, iron ore, bauxite, copper, timber, wheat, soy and corn, and, of course, hundreds of U.S. firms (maybe even GE!). This will produce inflation. The alternative is that China will view us like any Third World country, whose primary weapon against foreign debt is to allow inflation to pay off the debt. That is what we are doing with the falling dollar. Every week, China loses $1 billion in purchasing power due to inflation. How long is China going to put up with the falling dollar and allow America to weasel out of its debt? We need a $2 trillion bond issue so that we can create at least 1 million new bluecollar jobs every year for the next 10 years, each paying at least $25 per hour. We must build families, not prisons, to get the inner cities out of the malaise they presently experience. The motto should be “invest in America.” With the advent of green technology and transitioning to an infrastructure economy, we can get out of the mess we are in. Introspection, not isolationism, is the answer to our economic problems. RICHARD MOODY JR. Berne
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