Decline of American Civilization ? ( part one )

Is it just me or are we not witnessing in the past 12 months the total moral and financial bankruptcy of the United States to remain as leader of the free world as we know it ? I am so convinced that the US government and it's institutions have failed not only it's own population but that of all democratic nations in it's complete ineptitude to lead free market economies to a more sound economic footing, that modern nations should be seriously considering a wholesale shift away from the US dollar as a reserve currency to something more stable .

Considering the recent Madoff scandal (50 B) , the auto bailout (17B ), the financial bailout(700B) , the failure of American ratings agencies and the complete and utter failure and misguidance of the US Congres and American financial regulatory authorities , shouldn't other G7 nations be asking themselves "can we seriously hope the US to lead us out of this mess ?".

We are only seeing the first phase of the economic trickle down effect of the eventual evaporation of a trillion dollars of capital from the US economy only to rely on the same peole who caused this mess to try and fix it. Somehow it just does not inspire a great deal of confidence. ..

Who or what is to blame exactly? When you combine redneck politics with laissez faire economics and a limitless sense of entitlement to wealth without any moral obligation to actually earn it , we get a front row seat to unprecedented financial destruction. It's like a magnitude 8 earthquake set off the US coast whose ripple effects will result in Tsunamis all around the world for years to come.

The solution we are told is to let the US government save us and it's special interest industries and financial cronies, by printing it's way out of this mess by issuing more IOU's to you , me and anyone else in exchange for "safe haven " in the US dollar...but this false sense of security will certainly come back to haunt us.

The same lack of integrity, oversight , & financial foresight will only result in more lost billions ( that's hundreds of billions ) without a drastic improvememnt in the attitude of US governance and accountability. Independant ratings agencies without the competence to analyze new and sophisticated securities such as CDO's, derivatives, & credit default swaps basically were left to their own devices ( read temptations ) to decide who should get their best Triple AAA ratings and the corresponding billions of investment capital that can be accessed with it. Now we know how that has turned out ( i.e. the sup prime mortgage/ CDO crisis ) but the government still takes no responsibility or action to correct this situation. Rating agencies are not to be relied on anymore to properly rate anything objectively because at the end of the day they are still in business to turn a profit !.

They have proven themselves incompetant at this task and/or corruptible. Any person who thinks that a mortgage that does not require a significant ( i.e. 25% ) down payment to protect against fluctuating markets , and a personal guarantee from a credit worthy borrower , is completely incompetent (or greedy, if they can quickly lay off the risk on unsuspecting investors with store bought triple AAA rated stamps of approval from corruptible and incompetant sources ) ... and that's how it was done folks ...and the losses from this scandal will bankrupt many companies and individuals , possibly even nations , before it rights itself.


Another thing that needs to change ? US tax laws that encourage larger and larger mortgages on personal residences for write off purposes .This should be abolished or phased out to allow only up to say $200K to help first time buyers get a leg up. Personal guarantees should be mandatory as well so that when people contract a substantial debt like a mortgage they should not be let off the hook easily when markets retract, otherwise the retractiopn get exsacerbated with too many properties that people and banks want to dump .

The American dream has turned into the American nightmare illustrating that nobody is entitled to anything they do not earn. Trouble is even for the individuals that know this , the US taxpayer as well as those of many other nations will be left footing the bill for these excesses, and I would not blame them for being very pissed off about it. I can only hope that President Obama will become at least part of the solution to guiding the US ship of state back on a more worthy course to provide the US economy and government with a corective vision to halt America's decline.