Financial bottomless pit?
Wartime is here -– and Bush is giving away financial
handouts to the tune of US690 billion dollars in tax cuts. A further US$15
billion worth of promises has seen Turkey open access to tens of thousands of
allied troops, for a strategic northern border position, lining up against Iraq.
It has been estimated that the war itself will cost in excess
of US$100 billion.
SO where is Bush finding his money?
"When it came to office in 2001, the Bush Administration
predicted a fiscal 2004 surplus of US$262 billion; two years later, it is
expecting a deficit of US$307 billion. So fast and so large a swing, equal to
more than 5% GDP, is without precedent in US history. And it comes before the
cost of any war."
"Only a net capital inflow of US1.5 billion dollars a day
from the rest of the world currently permits the US to live in the manner
accustomed. And as the country's most venerated economic soothsayer Alan
Greenspan told the Senate Banking Committee on February 11, that cannot continue
indefinitely....He also warned that today's trade and budget deficits were
unsustainable. If unchecked, the federal deficit would reach a certain point of
'no return'..." NZ Herald 16.02.03.
What about the second biggest world economy?
Japan is on the verge of her fourth recession this decade -–
with the country's debt 40% bigger than the economy. Banks are struggling to
carry US$788.84 billion of bad loans. The value of the Yen must be lowered
according to most financial analysts, which is difficult for a nation which
exports more than it imports -– pushing the strength of the Yen.
Ironically, in Baghdad, the black currency (Dinars) market is
absolutely booming at a time of heavy trade sanctions and pending war. In 2002,
Iraq sold around US$15 billion worth of oil legitimately, enabling the import of
food and consumer goods. The black market managed sales of around US$2 billion
of oil in the same year and other forms of trafficking generates more than
US$100,000 per day. Not bad business.