The Lego Economy of America and how to fix it

The Lego Economy of America and how to fix it

It is no secret that our economy is in deep water, despite Wall Street Journal and Bernanke’s claiming of the recovery.California is a condensed version of states. With state is on brink of bankruptcy, it pays government workers IOUs instead of cash. Comparing the debts and deficits of California with the US, one has to wonder what is next for the country!

Our economy, if not interfered by monetary policy, is just a regular recession that corrects overdone of credit bubble. With trillions of new credit flood that distorts the normal cycle, we are facing grave consequences.Our economy, along with the competitive devaluation of all kinds of currencies around world, are much like a Lego system, that are not built on the bolts and nuts, instead it is (they are) built on a press-on hinges. They all look alike what they should resemble, but they all are as fragile as one finger away of destruction.

Our economy, has achieved a temporary balance, it may limping along waiting for the next bubble to burst, for our financial leaders and political leaders are unwilling to let the bubble burst.To fix the problem, although very late in the game, is to let the bubble burst. We shall have high interest rate, short pain of high unemployment, and savings and investments by the responsible business and consumers. We shall have firm dollar, which is the anchor of US prosperity. We shall have energy independence and a production based economy systems instead of pure consumption and service based system.California shall declare insolvent to start from anew. The property bubble has to be completed deflated. Government budget deficit has to be balanced. Same can be said to the US economy, because deficit spending will never last forever.