Friday, September 21, 2007

US on a Path to Economic Armageddon

Reviewing Greenspan's book, economist Paul Craig Roberts writing at Counterpunch eviscerates Greenspan for his failure to grasp the realities of what offshore outsourcing has done and is doing to the U.S. economy. Roberts say that the "U.S. is on path to economic Armageddon" because of these practices. It's a meaty article but well worth a read. If you can't or won't read the entire piece, look at the last 9 paragraphs.

Here's a sampling -- just the last 3 paragraphs:

A country that offshores its own production is unable to balance its trade. Americans are able to consume more than they produce only because the dollar is the world reserve currency. However, the dollar's reserve currency status is eroded by the debts associated with continual trade and budget deficits.

The US is on a path to economic Armageddon. Shorn of industry, dependent on offshored manufactured goods and services, and deprived of the dollar as reserve currency, the US will become a third world country. Gomery notes that it would be very difficult-perhaps impossible-for the US to re-acquire the manufacturing capability that it gave away to other countries.

It is a mystery how a people, whose economic policy is turning them into a third world country with its university graduates working as waitresses, bartenders, and driving cabs, can regard themselves as a hegemonic power even as they build up war debts that are further undermining their ability to pay their import bills.


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