Katrina: The Fiscal Hurricane

Have you ever been using Microsoft's Excel and gotten this response: Error, circular reference?
Go flush your toilet. Watch how the water spins around, that's where the economy is going. See, here is the thing. The rebuilding effort in the gulf states is going to cost at least $300 Billion dollars of federal treasury. We don't have it, how do we get it?

The US government is going to have to sell treasury bonds to foreign nations (China we need a quarter of a trillion!) to fund the relief. We're not exactly in a what in the business world would call a sellers market. Our interest rates are too low for a lot of foreign buyers tastes so we have three choices. None of them are very palatable.

Option one: We sell the equivalent to War Bonds sold during WWII. You aren't going to really make any money off of them but you're helping out. Reality: Pie in the sky.

Option two: Raising taxes. Really raising taxes. Reality: Not very fucking likely; however if someone finds Grover Norquist's body floating in the Potomac river, this might be on the table.

Option three: Significantly raise interest rates to interest the kind of foreign investment we need. This is the one we're stuck with. It comes with a lot of problems though. It sends us down the spiral staircase the Bush administration has done its damness to to do since being inaugurated in January 2001. It breaks out like this. We don't raise interest rates, we probably don't get the money. Remember, China, South Korea, and Japan are helpful but shrewd. They buy most of our bonds. So, we raise interest rates to spur them on. What happens, the economy slows down and suddenly you can't make your mortgage payment because you over bought or re financed with an adjustable rate mortgage. In other words, Katrina didn't burst the housing bubble, she blew it away.

Option three basically leads to financial ruin for a lot of Americans especially since the new bankruptcy laws require you to have your balls screwed to the floor while the banks kick you in the face.

Our one out, the Pacific rim might loan us out of this mess, because as goes the American economy, so goes the world economy. If I was George Bush, you would need a jackhammer to get my lips off of Hu Jintao's cock right now.

The economy set up by George Bush is the economy that will sink at least the republican party, maybe America for the near to middle term. It's circular, what push eventually comes back to shove you in the ass.