I would argue that there are more 'unknown unknowns' about China than there are about any other economic player on the planet, with the possible exception of Russia. That to me makes it difficult to assess Altman's thesis that China will come out of the recession in an enhanced position.

We know a great deal about the impact of the recession on the US and most of Europe. There are the monthly unemployment reports, GDP figures, production figures, etc, all of which are reasonably accurate although lagging the current situation.

China produces figures of it's own of course, but the accuracy of Chinese statistics is unknown, but probably a good deal less accurate and more self-serving than western statistics. Those are known unknowns.

More anecdotally there are the stories of sudden bankruptcies, disappearling billionaires, and sudden shutterings of plants and entire industrial complexes we have been hearing of from China. These have their western or non-chinese counterparts - Bernard Madoff, Lehman, etc. This week has seen the collapse of the 4th largest Indian outsourcing company. But our information is fuzzy again - we don't really know how bad it is.

China should be in a middling position in the recession. Demand for Chinese exports seems to be falling sharply in the US and Europe, which is going to hurt a lot. But prices of raw commodities are also falling, and China will benefit from this and from the 'Wal-Martization' of the US economy. European discounters like Aldi and Lidl probably are doing relatively well in the recession - one suspects they buy from China.

The final 'unknown unknown' is the likelyhood of trade wars, or at least trade battles. Omne lesson which came out of the Great Depression was that trade wars disproportionately hurt the leading export countries. I don't know how strong the WTO is, WTO may be about to encounter it's 'perfect storm', particularly if China, Germany, and other major exporters are percieved to be trying to export unemployment to their customer nations. This because about the easiest thing for a nation which perceives itself as a 'trade victim' to do would be to put up barriers of different kinds - tariffs, 'quality' inspections, etc.

If this occurs, I think China will be in a world of hurt.

Finally, there has been a veiled hint from some Chinese public figure that they could dump dollars and 'destroy'the US dollar. Surely that would be very damaging to the US, but in the short and medium term it would certainly drop the dollar's value against the remembi and a market basket of other currencies. It might well drop the euro, pound, and other curencies relative to the remembi also. This is surely the last thing the Chinese authorities want because it would make their cheap manufactures much less cheap in their major markets, while paradoxically making US exports much cheaper on the world market.

It would also make China unpopular, and not only in the US but any other country where many dollars are held or where the value of the dollar is relied upon. The chances are good that the US could replace sources of production for important goods which were priced out of the market in the US relatively quickly because the US has the technical ability to produce most things. Where it would hurt the US is by raising the price of oil and other commodities. But we've already surviced $147 a barrel oil, I expect the US could do so again. Particularly with higher employment from repatriated industries.

I have just subscribed to this web site. I wonder at the sanity of the comments above. No kidding. Other blogs are full of fulminators and non-substantive attacks. I hope this is typical of qualioty of commentary on this web site.

Martin Wolf's latest column in the Financial Times pretty much summed up for me the predicament (pickle) the U.S. is in. The studies he cites by Rogoff and Godley make for sober reading. In short, Wolf argues that the G-10 (pick a number) have about two years' grace to work out a global solution to the mess, or risk reversion to protectionism and worse that will bring about a global economic meltdown. I do not see any policy response coming out of the President-elect's activities that suggest he is even aware of the need for global coordination. Sarkozy and Merkel have already announced what the G-20 finance ministers should do in April.

On the other hand, Congress is pretty much rejected what Geithner & Co. came up with and are in the process of drafting their own stimulus plan with Geithner along for the ride. It looks to me as though a number of people have sized up Obama and decided he is a weak reed. All of this maneuvering for advantage over Obama makes any speculation about the relative strength of China vs the U.S. somewhat academic since the outcomes absent strong leadership could be catastrophic.

Which great power will recover more quickly?

Maybe the US, hard to tell. Much is made of China's fund of $2 trillion in US government bonds. That is a lot of money, but perhaps not compared to world wealth in general. A projected 'collapse' of the US dollar would do two things: It would cut US consumer spending on imports by a LOT - and make US manufacturing far more competitive in global trade markets (assuming there is no massive trade war) and domestically (regardless whether there is a trade war or not). Against that is the fact that it might make it too expensive for the US to import the best capital equipment from Japan, Germany, and the rest of Europe, but this might be overcome in part by Japanese and European companies investing in production facilities in the US, and also by their own depreciating currencies.

I have to assume that a dollar crash would mean that other currencies would appreciate equally suddenly, and there aren't that many candidates in the real world. The short list would be the remembi, the yen, and the euro - possibly the £. But the latter two areas have their own problems and would probably share a relative fall of the dollar, leaving the two Asian currencies as the big 'winners' - though I doubt the Chinese and Japanese governments would agree.

Note also that the sovereign capital funds of Russia, China, and the Gulf States aren't debts per-se. The US would not be required to pay off in revalued remembi but in devalued dollars.

The Chinese could call in the debts by buying manufacturing goods, food, or commodities. That is fine up to a point - I expect the US government would step in to prevent domestic shortages of food and fuel. All it means otherwise is that there is more work for US workers. The vast majority of the needs of US consumers can be produced domestically. French wine and cheese, German cars and beer, etc can be readily substituted domestically produced products with little suffering.

The one important exception is of course oil and other commodities. But even here this would spur a renowed US auto industry into a captive market for fuel-efficient cars; captive because the price of foreign imported models would be prohibitive.

Who WOULD suffer vast effects from a dollar crash? The list is short; I leave it as an exercise for the reader.

Which weak state will implode?

The usual suspects. We knew this before & little has changed except to add to the list perhaps. Zimbabwe, Gaza, Pakistan (military dictatorship again?). Perhaps one or two of the weaker Eastern European countries like Ukraine, Romania, the Balts, perhaps Greece. There is going to be a lot of stress in these latter countries with rapidly rising poverty, but civil war? I think not. Other candidates are South Africa, Argentina, Mexico, Brazil, Indonesia.

Which petrostate will get desperate?

In order of desperation: Bolivia, Venezuela (Hugo is toast), Iran, Russia. Perhaps Nigeria except it was a basket case already. Mexico will be feeling the oil pinch, but may also benefit from a trade war as US firms move factory work from Asia to the maquiladoras.

The fact is that the US may be forced out if it's consumption binge, and I argue that this would be good for the country and a lot easier to recover from than China might find recovery from losing export markets in the west.

Think about it. We've spent 60 years building the world trade system from Bretton Woods I through to WTO. But fundamentally national governments still control their national borders - and therefore who gets to supply the demand of their consumers.

A depression would put huge pressure on WTO, because we would see all kinds of efforts to manipulate the trade system and improve each country's export position relative to the rest of the planet.

The situation can stand only so much of this kind of thing. China already seeks to devalue it's currency versus the dollar and euro, but how much unemployment are the US and EU governments going to allow China to 'export' to Europe and the US? I suspect not very much.

What if the US were to apply it's own export subsidies like the Chinese ones? What if the US government were to sell dollars into the international money markets to depress the dollar? What if EU countries used similar policies, and the ECB sold euros into the markets?

It would be ugly to be sure. A breakdown of international trade would hurt everyone - but not as much as allowing one or two players to game the system to avoid all the pain while loading more unamployment on everyone else, eh?

Aren't the lessons from the 1930s that the exporting countries get hit the hardest, and that countries get tired real fast of their trade partners restricting local markets?

No two events are exactly alike, but the experience of the 30s seems to indicate that China will be hit hard, and that we could see a breakdown into smaller trading blocs, as countries throw up their own barriers to those whom they perceive as being unfair. China has a huge cushion right now, but since no one really believes their official government figures, as it becomes harder to know what's really going on there, it seems likely that there will be a significant drop in foreign investment.

The main exporting countries were Australia, Germany and Canada.

The notion that China doesn't need us as a market strikes me as absurd, so I'm not sure if you're making a theoretical point. Again, one of the lessons of the 1930s is that a breakdown in global trade goes a long way toward exacerbating a depression, and that the export countries were among the hardest hit.

It seems highly unlikely that China could simply turn its propaganda on a dime and, after decades of economic liberalism, say to its people, shucks all that stuff we were telling you about making you rich, it was wrong, and let's go back to Mao. There's already significant unrest there, and that could easily be the spark that topples the government.

Again, your theories are interesting, but I don't see how they apply on a practical level.

The current leaders of China wish to stay in power. They wish this more than proving any theory of Marx to be true. (I mean, the Chinese Communist Party is really the Chinese Oligarchy Party). They fear and are already suffering some social unrest. They have been unable or unwilling to control the massive corruption that's accompanied the increase in wealth, and that also leads to inefficiencies and social unrest. The US is about 40% of the Chinese export market. Exports are about 70% of China's GDP.
Exports from places like Taiwan and Korea have fallen off a cliff over the past months, so China is sure to follow, which may put them in a recession no matter what they do, which could likely cause further social unrest and the possible overthrow of the government.

What we're learning is that the whole theory of decoupling was a crock; the Asian economies were largely just trade multipliers for US demand with China the endpoint for assembly.

So, under these conditions, do you really think it's reasonable that they would close off 40% of their export market? If Obama wanted to change China's leadership tomorrow, he'd have a pretty good chance by simply banning Chinese imports (of course, they could hurt us bad, too). n fact, it seems more likely that China will respond by flooding our markets with even cheaper goods. Or, are you arguing that an Asian society will be transformed into high consumers during a worldwide recession/depression? Both of these seem to be unreasonable to me.

But I've got to go back to my original point, which was the lessons from the 1930s: that the exporting countries were especially hard hit. Just as a logical matter, a reduction in US overconsumption must force a corresponding reduction in overproduction elsewhere, and China is likely to bear the brunt of that (and the difference in population size between the two countries is likely to magnify that in China).

And we're already seeing some of the same bad decisions from the 30s being repeated now; 5 of the G20 have already announced protectionist policies. This seems to me to be the real fear.

The only thing that will save the US Economy is re-building of our gold reserves to preserve the buying power of the dollar. The only way to do this is to export more that we import. The only way that we can accomplish this is to re-industrialize. In the last few decades we have destroyed the industrial base that won WWII and gave us today's bountiful way of life. Paying people to plant trees, dig holes then refill the same holes, rake leaves, write poems, paint pictures, etc. will not be useful or contribute to correcting the US economic problem. This does not necessarily mean adopying the gold standard.

As long as the US government continues to just crank up the presses and print more dollars, T-Bills, Government Bonds, etc. to pay for these pork barrel projects, negative balance of trade, government payrolls, bailouts, entitlements, operations, social schemes, wars, new infrastructure, wealth re-distribution, mental health, and etc. We will see the buying power of our dollars diminish until a loaf of bread costs $200.

What if the US government prints up a bunch of new paper money and other similar paper securities to pay people to re-build and expand the US infrastructure (Pork Barrel Projects) in order to reduce unemployment, and it is all then spent on illegal aliens, imported earth-moving machinery, imported materials (Steel, equipment, Pipe & Wire), outsourced engineering, outsourced CAD drafting, immigrant labor, etc., and the US workers are still unemployed? This is probably necessary at this time, even if it will cause massive inflation. Any Economic Stimulus Spending also needs to prohibit any imported products from being purchased with these funds, and also prohibit all outsourcing of the Labor Required.

Since the US government stopped redeeming US dollars for gold, foreign governments and foreign individuals continue to use these dollars (and other US securities that they earned in exchange for their products that they exported to the USA) to purchase title to real estate, forests, industries, breweries, hotels, factories, casinos, financial institutions and everything else of value that is located in the USA. We paid these foreigners with our dollars to manufacture or supply the things that we imported and consumed (rather than US citizens working to make these products ourselves in this country). Some government sources estimate that 25% of our property and businesses are now foreign owned.

There is probably a limit to the amount of paper dollars that the foreign country manufacturing people and the foreign country raw material supplying people will continue to accept in payment. This limit will become apparent as soon as foreigners own everything of value in the USA and nothing is left for foreign dollar holders to buy with their dollars. This is selling of our children's legacy to foreign owners and the US government calls it "Investing in America".

The USA population will probably become employees (or maybe slaves) to the foreign countries and individuals that will own everything of value in the USA. The foreigners know that these US dollars will buy less and less each day that they do not spend them. They also know that these securities are not redeemable for anything except the "full faith and credit of the USA" (aka junk bonds). Our children and grandchildren might also have to change to the religion of the business owner if they want a job.

Future nationalization of foreign owned assets (ala Mexico) is another discussion topic for another day.

It is not the foreigner's fault that this condition exists. We created this condition ourselves. We have destroyed most of our industries and fired all of the employees that were located in the US for various reasons. Why should we make the things that we consume as long we can get people in other countries to work to make these things for our consumption? We can pay them with freshly printed-paper currencies and other types of freshly printed-paper securities. They can redeem these freshly printed-paper currencies by exchanging them for title to our real estate, hotels, forests, breweries, casinos, factories, and our remaining businesses (instead of Gold). Our Stupid Legislators, Ignorant Government Employees, Bad Corporate Managers, Greedy Unions, Wall Street Financial Geniuses, Enron and Arthur Anderson type Master Criminals, NAFTA, EPA, and OSHA, just to name a few, have created this situation.

How can we ever re-start our industries (re-industrialize) to generate a positive balance of trade? Most of the men who knew how to operate the basic industry factories are now long dead. There are no books that completely tell how to do most of the things that we knew how to do years ago when we created the industries that won WWII and gave us our bountiful way of life. We need science-oriented citizens to create things and services that we can exchange for foreign currency and foreign gold.

Our computer programming technology and expertise (Microsoft etc.) has helped our balance of payments considerably in the past, but the lack of technical education in this country today will soon destroy this export capability when foreign countries become better than the USA at creating new computer software programs.

Visit the Texas Medical Center and witness the percentage of women wearing Burkas to get a clue as to the percentage of foreign medical service income is received at the Texas Medical Center, and this improves our foreign trade balance.

We also need more engineers to innovate and produce new products to export and also to export services that will improve our balance of trade.

We need to stop the H1B import of low paid professional talent, in order to create an incentive for our students to major in technical subjects that are needed to re-industrialize the USA. Only a positive balance of trade will protect the purchasing power of the US Dollar, or the USA will never return to the economic powerhouse position that we enjoyed during and after WWII. We must create tariffs to imports that will be sufficiently high to effectively prohibit all foreign imports in order to re-create our industrial base and export products that will improve our balance of trade, increase our gold reserves, and protect the buying power of our dollar.

I believe that this country needs people educated in science, medicine, mathematics and engineering if this country is ever going to re-industrialize rather than print money and sell our future to support ourselves today. We cannot afford to support any more artists, actors, theologians, musicians, philosophers, psychologists, historians, poets, novelists, political scientists, etc. According to the National Science Foundation and the National Society of Professional Engineers, only about 5% of the current college students in the USA are studying science, medicine, mathematics or engineering are US citizens, as compared to Asian Countries where the majority of the college students are majoring in science or engineering. I am worried about the future of my college age children, and all of the other children in the USA.

There is very little financial incentive for students to study engineering since the pay scale has decreased drastically over the years since I graduated from Texas A&M BSME in 1960. In 1960, the bottom quarter of the graduating engineers started at double the starting pay of the top quarter of the Law School Graduates. Now these starting pay scales are reversed. I believe that most college students today want to study business and/or economics and then become Enron type Master Criminals, similar to some of the other extremely wealthy master criminals of today who are seldom ever detected, and almost never convicted. The science and engineering pay scales have eroded primarily due to the import of foreign engineers who will work for just slightly above minimum wages for a H1B Visa and a Green Card. The foreign educated engineers might only be partially as productive as US educated engineers, but they are willing to work for only 10% or 20% of the pay that US educated engineers are paid (or used to be paid) then it is much more economically effective to employ foreign educated engineers when compared to employing U.S. educated engineers, except for the additional liability of their design failures.

I had my children late in my life. My daughter and my son started college as Mechanical Engineering students. My daughter made almost straight A's at University of Texas Austin in Mechanical Engineering for the first three semesters, and then decided that there was no economic future in engineering, so she changed to liberal arts. (I think that her sorority sisters made fun of her for studying.) I also remember that she told me during her sophomore year Christmas break that she needed to "learn how to party". My son also saw no reason to study hard and changed his major in the first semester of his freshman year at Texas A&M from Mechanical Engineering to General Studies. They want to become lawyers. Law is a much more financially rewarding field.

The Glass-Steagall Act (GSA) was enacted during the Great Depression in 1933. It protected bank depositors from the additional risks associated with security transactions. The act was repealed in 1999 by congress and President Clinton. Consequently, the distinction between commercial banks and brokerage firms has blurred; many banks own brokerage firms and provide investment services to their customers. Gramm-Leach-Bliley Act, which eliminated the GSA restrictions against affiliations between commercial and investment banks. Furthermore, the Gramm-Leach-Bliley Act allows banking institutions to provide a broader range of services, including underwriting and other dealing activities.

Jeff Skilling, Ken Lay, and Fastow swore to false statements, perjured themselves, and generally lied about everything that they filed with the SEC. They all need to rot in prison. Their prison sentences should be proportionate to the amount of money stolen. They need to die in prison. Bush will probably pardon them. These Enron and Arthur Anderson type Master Criminals are now studied and emulated by the current crop of Wall Street Financial Geniuses who studied their successes. We need legislation to make the CEOs become criminally responsible for any false company financial statements filed with the SEC. Many more CEOs need to be in prison as Bubba's cellmate.

We have met the enemy and it is us.

Three years ago, in the Preface to "America's Suicidal Statecraft: The Self-destruction of a Superpower", I wrote:

With debt of a magnitude few of us can readily conceive, with trade deficits of enormous proportions, with a gutted manufacturing sector and the ruthless reduction of the community of skilled factory workers, with a corporate culture that has lost its traditional dedication to real investment, productivity and production in favour of “ownership” and speculative enterprise, the United States appears to be moving rapidly along the road to ruin. The most forbidding of economic crises – with a variety of themes, aspects and complexities – seems to threaten just a short distance down that road from where we are now. If and when it arrives, a turmoil and misery to put the Great Depression of the 1930s to shame could afflict the American economy and the American people – and persist perhaps for a decade or more.
But the menace goes much deeper even than that. The United States has not just participated, as one of the mob, in a malaise that has afflicted everyone, worldwide. Some, especially the Anglo-Saxon countries, have similar problems; but, while they and the United States have been slipping, some other countries have made unprecedented progress in developing their economies and advancing their influence and power in whatever area – economic, social, cultural, political and, most menacing of all, strategic. The United States has itself engineered both its own decline and the elevation of those who might be regarded as its actual or potential rivals. These include China which has, in the last two decades, moved rapidly up the ranks of high economic achievers to lie now fifth among the world’s biggest economies. Only the United States, Japan, Germany and possibly Britain are still ahead of the awakening giant. Given the great differences in rates of economic growth, China is likely to move into third position fairly soon and, not many years thereafter, push ahead of Japan, the country that Deng chose as his model back in 1979. Only the United States will then lie ahead – assuming that the American economy, with its several bubbles, does not collapse in crisis even earlier. If present disparate rates of growth continue, China will close the gap in Gross Domestic Product with the United States quite rapidly and, though we cannot give any date, will become the world’s number-one economy and will still be growing.
Power accrues to those who know how to navigate efficiently on the stream of time. That efficiency is closely related to economic competence: the ability to manage and grow in real terms on the back of real investment, rising productivity and mounting production. Economic power nourishes other forms of power: political and strategic power in particular. Traditionally, conflicts tend to be related to changes in economic power and the status that economic power confers. The causes that precipitate the conflicts are varied but can include such crucial concerns as access to oil and other vital resources.
On these bases, we could have ahead of us a world in turmoil as the mantle of the world’s single superpower falls from the shoulders of the United States and is assumed perhaps by China or a group of countries collaborating together. The Bush Administration has recently been talking to two of its closest allies, Japan and Australia, about the “containment of China”. In the same vein, it has been cosying up to India as a possible counterweight to China. Australia is dubious about “containment.” Japan seems more responsive; but any ideas of “containment” may now have passed their use-by date. If they were to be effective, they should have been a major influence on policy some time in the last twenty or thirty years when and after Nixon and Kissinger paid their visits to China. To mean anything, “containment” now can only imply a reversal of the American policies that have turned China into a candidate for “containment.” Those policies seem already to have done the job too well for their reversal to affect substantially the relative power positions of China and the United States now and, ever more importantly, in the ten, fifteen or twenty years ahead.

In the three years that have passed since I wrote that, the scenario that it envisaged has continued to be played out. Even now, with Obama on the threshold of assuming power, the United States has still shown little real determination to get back to what made it great: the possession of the most efficient economy that ever was - when it is organised in the ways that free enterprise and democratic capitalism require.
All that has happened so far is that huge expenditures have been made or are being made to keep a failed financial "system" on life support. The speculative, Ponzi-type financial arrangements which have drained the formerly greatest economy in history of its strength have been plied with trillions of dollars in the hope - presumably - that, desperately toxic as they are to the vitality of the United States,they must not be allowed to "fail."
The helicopter drops which Bernanke envisaged some years ago have appeared in their massed squadrons and they still keep coming.
They will not be fewer under Obama and their drops will not be of fewer trillions; all the evidence is that they will be greater - perhaps many times greater.
The rhetoric of Obama has been impressive: he is the Messiah to save the American economy and its status as a superpower.
But so far he seems to be advised by the same people and to be doing or contemplating the same measures and policies as those which have brought the United States to the brink of its greatest catastrophe of all time - not only financial and economic but potentially political and strategic as well.
There is still hope. That hope has to be based on determined measures to get the United States back to policies which characterised it especially in the quarter century after the Second World War. There will need to be "soup kitchens" to rescue those who are most desperately and immediately vulnerable but the only policies which will deliver a real rescue and resuscitation of the United States will be policies that restore America's real investment, productivity - of real goods and services - and production - again, of real goods and services that met human needs and safeguard them.
Will China - and other potential rivals - suffer even more dreadfully in the crises ahead - so that, though diminished, the United States will remain top dog?
It is possible - China and others are quite capable of making errors too; but if that is the only way for the present status quo to be preserved - whatever the cost - then the cure may be more devastating even than the present disease.

When you go to anywhere in the USA to buy anything, look to see where is it made? Not in the USA. When you buy $1,000.00 tools, parts, etc at Home Depot, they send maybe $500.00 to maybe China to buy these products. The US Government no longer allows US dollars to be redeemed with gold. The US government does allow the Chinese to redeem these freshly printed paper dollars that they earned to purchase title to real estate, forests, industries, breweries, hotels, factories, casinos, financial institutions and everything else of value that is located in the USA.

There is (probably) a limit to the amount of paper dollars that the foreign country manufacturing people and the foreign country raw material supplying people will continue to accept in payment.

This limit will become apparent as soon as foreigners own title to everything of value in the USA and nothing is left that the foreign dollar holders want to buy with their freshly printed paper dollars. Some government sources estimate that the title to 25% of our property and businesses are now foreign owned (http://www.economyincrisis.org/content/ownership).

What will be the buying power of the dollar when we have nothing left to redeem the dollars earned by foreign manufacturers????????? This is selling of our children's legacy to foreign owners, and the US government calls it "Investing in America". This is sort-of like selling our body parts to keep from working!!!!!

Only a positive balance of trade will restore the value of the dollar, and we must accomplish this by any means possible, or accept third world poverty on a large scale basis. Riots and insurrection are predictable, ala the French Revolution, when the people find their situations economically hopeless.

As long as the US government continues to just crank up the presses and print more dollars, T-Bills, Government Bonds, etc. to pay for these pork barrel projects, negative balance of trade, government payrolls, bailouts, entitlements, operations, social schemes, wars, new infrastructure, wealth re-distribution, mental health, and etc., we will see the buying power of our dollars diminish proportionally.

The current US government economic stimulation plan is to buy some paper and then print up a bunch of new paper money, T-Bills, Bonds, and other similar paper securities and give these items to US contractors to re-build and expand the US infrastructure (Pork Barrel Projects) in order to reduce unemployment. This money will probably be spent on imported earth-moving machinery, imported materials (Steel, equipment, Pipe & Wire), new imported private executive airplanes, illegal alien labor, outsourced engineering, outsourced CAD drafting, etc., and the US workers will still be mostly unemployed? Foreign suppliers will accept these freshly printed dollars that they earned in exchange for their products that they manufactured to purchase title to real estate, forests, industries, breweries, hotels, factories, casinos, financial institutions and title to everything else of value that is located in the USA. Maybe the Economic Stimulus Spending also needs to prohibit any imported products (even if we no longer currently manufacture those products) from being purchased with these funds, and also prohibit all outsourcing of the Labor Required. This is probably necessary at this time, even if it will cause massive inflation.

How can we ever re-start our industries (re-industrialize) to generate a positive balance of trade that will restore our economy? Most of the men who knew how to operate the US basic industry and factories were fired 30 years ago and are now long dead. There are no books that completely tell everything about how to do most of the things that we knew how to do years ago when we created the industries that won WWII and then gave us our bountiful way of life. We need science-oriented citizens to create products and services that we can exchange for foreign currency, Foreign owned US dollars and foreign gold.

It is not the foreign manufacturer's fault that this economic condition exists. We created this condition ourselves. We purposefully destroyed most of our industries and fired all of the employees that were located in the US for various reasons. Why should we work and make the things that we consume as long we can get people in other countries to work to make these things for our consumption? We can pay them with freshly printed-paper currencies and other types of freshly printed-paper securities (Junk Bonds). They can redeem these freshly printed-paper currencies by exchanging them for title to our real estate, hotels, forests, breweries, casinos, factories, and our remaining businesses (instead of Gold). Our Stupid Legislators of both political parties, Ignorant Government Employees, Self Serving Corporate Managers, Greedy Unions, Wall Street Financial Genius Criminals, Enron and Arthur Anderson type Master Criminals, NAFTA, EPA, WTO, and OSHA, just to name a few, have created this situation.

When we can no longer buy paper and print more dollars to pay for our imported products and government activities, we are in deep trouble with no quick way out. It is going to take decades to re-create the US industrial bases that we destroyed over the past few decades. This will first require that our students study science instead of other subjects in our colleges, in order to create the technical capability and other things that support re-industrialization. We must emulate China, India, Pakistan, or die economically.

How can we ever re-start our industries (re-industrialize) to generate a positive balance of trade that will restore our economy? Most of the men who knew how to operate the US basic industry and factories were fired 30 years ago and are now long dead. There are no books that completely tell how to do most of the things that we knew how to do years ago when we created the industries that won WWII and then gave us our bountiful way of life. We need science-oriented citizens to create products and services that we can exchange for foreign currency and foreign gold.

I believe that this country desperately needs more people educated in science, medicine, mathematics and engineering if this country is ever going to re-industrialize rather than just print money and sell our future to support ourselves today without producing the things that we consume. We cannot afford to support any more artists, actors, theologians, musicians, philosophers, psychologists, historians, poets, novelists, political scientists, marketing experts, etc. According to the National Science Foundation and the National Society of Professional Engineers, only about 5% of the current college students in the USA are getting a degree in science, medicine, mathematics or engineering are US citizens. In the Asia the majority of the college students are majoring in science or engineering. I am worried about the future of my college age children, and all of the other children in the USA.

I believe that there is very little economic future in engineering. I believe that most students today (including my children who started in Mechanical Engineering but changed majors to easier courses) want to study business and/or economics to become Enron type Master Criminals, or like some of the other extremely wealthy master criminals of today. No person in his or her right mind would major in science or engineering since the pay scale has eroded so much (maybe due to the import of foreign engineers who will work for just slightly above minimum wages and a Green Card). The Foreign Engineers might only be 25% as productive as US educated engineers, but they are willing to work for only 10% or 15% of the pay that US educated engineers are paid (or used to be paid) then it is twice as economically effective to employ foreign educated engineers when compared to U.S. educated engineers, except for the additional liability of their design failures.

Nations have always taxed the agricultural and industrial population to pay for providing National Security, Crime Prevention, Education, Fire Prevention, and other similar items that are necessary to assist and protect their agricultural and industrial production base. Our Productive Industrial Base could not exist with foreign invasion, rampant crime, protection rackets, corruption, sabotage, etc., so a portion of the money earned by this producing base has always been taken by taxation by all civilizations to pay for federal, state, and local governments to prevent these occurrences.

Maybe we can no longer afford to spend our hard earned taxes on National Service, social entitlements, welfare, environmental clean-up, pork barrel projects, free education, free medicine, subsidized housing, humanities, art, writing poems, make-work schemes, digging holes then re-filling the same hole, etc. until we re-establish our economic base.