Letters to the Editor
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It is, in fact, even worse than that
While we've been putting this war on the credit card, the credit card hasn't been American Express, or Visa, or even MasterCard. Americans aren't being asked to buy war bonds as they were during WWII to help fund the war (which, by the way, would have had the effect of soaking up all that liquid capital that went into the housing bubble). No. We've been putting the war on our store cards: The Chinese Cash store card, and the S. Korean cash store card, The Abu Dabi and Saudi Arabian store card, etc. This is debt owed to sovereign nations who are really going to want their money back. Since this debt is external, that huge sea of American dollars being held by foreign governments (as T-bonds and T-bills) carries with it the real risk that the American dollar will become worthless which will, in turn, destroy the American economy.
The Shrubbites love to talk about security. Who is more secure? The family who is in debt up to their eyebrows and is having problems making their debt payments and are constantly being dunned by collection agencies or the family that has its debt under control and is current on its payments?
We've been here before. Vietnam (and its attendant guns and butter policies) left us with a huge overhang of foreign debt. It was the proximate cause of the wage and price freeze in 1971 as well as our abandonment of the gold standard at the same time. There are two major differences between then and now. One, we were just transitioning from a creditor nation to a debtor nation. Now we have been a debtor nation for 40 years or so. And, two, back then we were pretty universally respected and liked. Not so much anymore. The world is different.
The risks to America from its irresponsible behavior are much, much greater than they were after Vietnam. Hopefully, the 'C' student who is The Current Occupant won't cancel the 2008 elections because he clearly isn't up to the task of managing those risks. Nor is he up to leading America through the painful steps that will be required to right our international financial boat.