The Economy in General

Yes, I believe that the US has the material, human and economic resources to rebound from the current economic situation. The problem is that the various financial instruments which are causing the problems, things like Collateralized Debt Obligations (CDO's) and Situational Investment Vehicles (SIV's) are impacting the economy on a wide scale. The root of the recent economic boom, like in most business cycles, was government intervention in the markets through the artificial lowering of interest rates during the first half of this decade. Interest is essentially the price of money, so the government was engaging in price fixing, which meant that the supply and demand equation was distorted. Now the market is trying to adjust back to normal prices. The problem though is that the adjustment is leaving a lot of banks with assets that they overpaid for during the boom under the assumption that the market would grow indefinitely. Really its nothing new--people for some reason don't r... Read more

We'll see immediate change if Congress would allow domestic drilling. OPEC would lower their prices immediately by a minimum of $50 per barrel.

America still has more overall resources (human and natural) than any other nation on earth. There is no reason to believe that current economic problems can't be overcome with enough ingenuity and effort, as previous ones (The Great Depression, 70s Stagflation) have been. However, our society and political system have become so ossified that such changes are unlikely. More likely, we will continue making gas-guzzlers no one wants to buy, support failing banks and hedge funds that are little more than VIP casinos, squander money on imperial adventures while our infrastructure collpases, and pay the bills by printing money. Certain regions and industries may prosper, but the overall prospect is not good.