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Overleveraged = rookie mistake
One common theme to the mess we're in is that we're irresponsibly overleveraged. i.e.
Financial Markets: (Obviously)
Feneral Budget: 9 Trillion in debt with about 20% of the national budget going to interest payments. If 20% of my personal income was going to intereest payment, I'd be worried.
Military: We're basically borrowing on the future as too many deployments are killing recruiting.
Foreign Policy: If you consider the use of hard power to soft power to be leverage (and I do), then we are obviously overleveraged here as well.
I think it's an important point because usually reckless use ove leverage is a sign of lack of experience (i.e. you haven't been around long enough to see the back-end consequences). Experience is meaningless unless it results in wisdom.
The fact that McCain wants to increase our leverage in several areas (increased debt, deployments, etc) doesn't speak well for his experience. It says a lot about his foolishness.
Comments (2)
Great points.
I am constantly wondering why we have such ignorant people in charge who are obviously unable to learn from their mistakes. It is very easy to see what we are doing wrong, which leads me to believe neoconservatives either created that environment on purpose or just didn't know the consequences of their actions ahead of time and are too stupid to fix it.
Either way, we need new leadership or this country is toast.
September 18, 2008 10:53 AM | Reply | Permalink
Bravo - great post.
The other key part is liquidity.
Not enough short term capital to fund expenses if there is a financial bump in the road. As for the Feds, they own the printing press, but the consequence is inflation, which we are already seeing. Can't go there. The troops are committed in two theaters - what happens if something serious happens in North Korea, for example?
It's harder to draw a corollary with diplomacy, but if liquidity is like respect and trust, we're overdrawn.
September 18, 2008 12:14 PM | Reply | Permalink
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