Uh-Oh, How Bad Is This Going to Get?

**Lemur** · 12-11-2008, 15:39

Not a reassuring read ...

It's quite unsettling to talk to members of Barack Obama's transition teams these days, especially those who are helping with the economics portfolio. Without going into details, the sense I get from them is that they are very worried that the economy will get a lot worse before it gets better. Not just worse... a lot worse. As in -- double digit unemployment without the wiggle factors. Huge declines in aggregate demand. Significant, persistent deficits. [...]

Where the discussion isn't going, at least in public, (or the PR level), is the possibility that the first foreign policy crisis the administration will face will be the complete economic collapse of a large, unstable nation. To be sure, Pakistan is nearly broke, and U.S. policy makers seem to be aware of that; but a worldwide demand crisis could lead to social unrest in countries like Indonesia and Malaysia, Singapore, the Ukraine, Japan, Turkey or Egypt (which is facing an internal political crisis of epic proportions already). The U.S. won't have the resources to, say, engineer the rescue of the peso again, or intervene in Asia as in 1997. [...]

The question: what's the administration's policy in this area? Which countries can we afford to let fail? Which unstable states would concern us the most? Is there something the U.S. can do, in advance, should do, in advance, to forestall the collapse of other economies?

Wait, so we not only have to worry about our own deepening recession, we have to worry about the Ukraine and Egypt as well? Dang.

I guess Obama really did win the worst job in America.

**GeneralHankerchief** · 12-11-2008, 16:39

If there's been one constant in the past year, it's the fact that economists have been consistently, utterly wrong about almost everything. Therefore, I wouldn't be too worried.

**yesdachi** · 12-11-2008, 16:54

I just got an e-mail update from our local business newspaper on how some experts are expecting the unemployment rate to increase by at least 2.4% here in west Michigan over the next year. I thought things were going to get better, maybe they will, after they get worse.

I find it difficult to care much about other countries economies (especially ones so far removed from my day to day life) while this one is falling apart.

**Tribesman** · 12-11-2008, 17:13

Which countries can we afford to let fail?

Might I suggest since coupled with a worldwide economic meltdown there is a major worldwide food crisis then the countries that the US should support are those that have reasonable crop yields and who have not yet banned or restricted the export of staple foodstuffs .

**yesdachi** · 12-11-2008, 19:23

Originally Posted by Tribesman

Might I suggest since coupled with a worldwide economic meltdown there is a major worldwide food crisis then the countries that the US should support are those that have reasonable crop yields and who have not yet banned or restricted the export of staple foodstuffs .

Wow, you have just solved the US’s economic problems. We let those food growing countries fall so we can corner the food market, artificially inflate the price and then sit back on our windfall profits from farming while the banking and auto industries recover.

**Vladimir** · 12-11-2008, 19:44

Damn. Another global depression AND a Democrat in the White House? I hope it doesn't take another ten years for the next world war to start; I might be too old by then!