How insane is the Japanese fiscal profligacy? Fully 42% the government expenditures are financed with government bonds--i.e., borrowed from buyers of the bonds. This is deficit spending on massive scale.

On Oct. 12, the U.S. Federal Reserve Board of Governors agreed to extend Federal Reserve contingency lines of credit to two British banks—$10 billion to the Royal Bank of Scotland (RBS), and $20 billion to Barclays, two of Britain's Big 4 banks. The Federal Reserve would open these $30 billion facilities to the two banks, should the banks, in turn, need them to extend credit to their clients "in need of short-term liquidity to finance their holdings of securities and certain other assets," the Federal Reserve said in a letter to the banks.

An economist on Lou Dobbs declared that his studies showed that middle-class people were no worse off than in years past and if fact in some instances they are better off. This claptrap reminds me of the couple in California who wrote a paper justifying the purchase of their $900K+ home at the top of the market. They even "proved" that the house was undervalued. All the statistics were correct but they were absolutely wrong and are probably in the throes of regretting it.

Credit contagion infects your wallet
The mortgage mess has already spread to car loans and credit cards. If consumers run scared and stop borrowing, the economy is in big trouble (Jim Jubak, MSN)

Jubak is absolutely correct in his assertions that the credit card and auto loan apparatus are coming under pressure. But he misses the point. What ever happened to purchasing with one's wages. We would not be here if wages were keeping up costs. Now the government must come up with all sorts of ill-fated and ill-advised bailouts for everyone. Banks, mortgage lenders, brokers, baby boomers who abandoned saving because they decided their home was the best piggy bank/annuity/ATM ever, must all be bailed out or the economy suffers implosion.

Globalization as conceived and executed has had terrible consequences. Didn't these the geniuses who pushed this realize that wage arbitrage would follow? Didn't they realize that the normalization of 1st world wages to that of the rest of the world would have to be accompanied by lower asset prices. I have no hard proof but it seems clear that at least empirically the thinking was that we could have our cake and eat it, too. That is, we could have normalization of wages and asset prices would soar or stay the same because credit expansion coupled with the "Always low prices" of goods produced in foreign sweatshops would save the day and keep alive "growth".

We have said that no state or individual has ever borrowed its way to prosperity but that implies that all borrowing is flawed. Self liquidating debt is a means of borrowing to prosperity because it produces goods and wealth. Going into debt to consume rather than produce has limits and I can't see how anyone bright enough to study economics missed this. (emphasis added--CHS)

The impoverishment of America will be televised. And though it may offend sensibilities, Osama is not very smart or wise nor is he up on his history. Had he been, he would have know that he should have waited and preserved the lives of his followers. Empires destroy themselves only to be replaced by another.