Ajay,

The World Bank calculates national wealth based on national assets over population. Oz and Canada are ahead of the US on this measure.

If memory serves, both Texas (a country in 1841) and California have gross economies larger than Australia's.

Seventy-five percent of the World's wealth is outside of the US. Organizations like Singapore's Tamasek Holdings et al. can go to the fire sale and acquire US assets. Thatcherism in reverse.

All,

Don't let them sink. Let the Market work. Is Capitalist Socialism no longer a tautology?

What would be a danger the World economy is the US changing to a protectionist stance to stop billionaires becoming Rooty Hill Billies.

O

I'm watching this with great interest.

The minimalist government Republicans are suddenly all for government intervention. Sounds a bit like capitalism with a socialist cushion and government stepping in when the market forces are trying to balance out. Please Daddy, we need help, can you give us a loan?!

Either the Republicans truly believe that free capitalism with no government interference is the best way of providing the best standard of living for all or they don't. What is it with them suddenly calling for a taxpayer funded bail out?

If a bail out isn't agreed upon the rest of the world will suffer terribly. How we all try to emulate that fearless and free capitalism American style. The USA is SO rich.

Dare we suggest that unfettered capitalism is as unworkable as is communism? That they are but opposing extremes?

Oliver,I just want to get things in perspective.It seems that no one has put a value on the total worth of the US both public and private.The same can be said for Aust.Their $11.7 trillion debt is still probably a very small proportion of the total land,industry,housing and people value of the US.This taken into consideration,their only real enemy now is fear and distrust which is causing their economy to falter.Money is only a facilitator and it has no intrinsic worth,when it's function is perverted so does it pervert the functioning of the real economy.

Unlike the Great Depression people now have access to an enormous amount of information.When you are more able to understand the disease,then strategies can be put in place to counter act it.

I see the major problem as premoting confidence for people to continue spending thus maitaining their own jobs.The spiral backards will just see more assets devalued well below their true worth and jobs lost that need not happen.

*On the other hand, the democrats, who stacked the boards of Fanny Mae and Freedie Mac instructed those institutions to make loans to low income and minority clients.*

Paul L, whilst I agree with much of your post, the above is a bit of
a cop out. At the end of the day, George and Dick have made the rules
for the last 8 years, the blame is on their shoulders. As I have
said for 8 years, they are a pair of dummies and American voters
are now paying the price of electing them. I don't confuse the
principles of capitalism, with dockhead politicians, as those two
clearly are.

Yesterday I heard an interesting discussion on ABC radio, where
an American economist actually made a great case, that a recession
is what we need, to bring things back to what is sustainable.

I cannot argue with some of his points and many apply to Australia
as well.

Both America and Australia have been living it up on borrowed money,
largely from Asia and the ME. Asians are frugal savers, we borrow
to the max. That is simply not sustainable.

The result of easy and cheap credit has caused houses to be way
overvalued, as the Economist has pointed out for years.

A recession, however painfull, restores the value of money and
brings things back to some kind of sustainability. Those who over
borrowed will pay a price, those who were greedy will pay a price.

Many who are guilty of nothing will pay a price, but on the other
hand, the merry go round of ever rising credit had to end at some
time. Best to deal with it now, for it had to end at some time.

In terms of the West Australian economy, some kind of slowdown will
have to be a good thing, for things have simply gotten out of hand
over here.

Hi Graham,

Good topic.
As the news show, a full bailout didn't rally the markets and won't stop a US recession.

I think a partial bailout is a good proof of concept within the lines of a rescue plan for some of the unlucky but exclude the reckless. Good for the government to intervene to rescue corporations but not to bailout all bad debts so no body really learn anything.

Peace,

Ajay,

I agree with you on both points. The US economy/wealth huge and eonomists now much more about how markets operate than in the GD.

Protectionism to protect the status quo, is still a concern.

Historians Toynbee and Quigley, both have studied the protection those in power stance, as a measure of decline. Yet, the West unlike twenty-two other recognized civilizations has survived declines and atypically, as Huntington notes, has two centres (Europe & the US).