Our Changing Globe

For at least five years, I have told people that capitalism would soon collapse but was nearly always mockingly asked, “and what will replace it?’, to which I had and still have no real answer.

I did, and do know however that you can’t base an economy on debt and expect it to last and that is exactly what the U.S. economy is based on.

Just today I read that California is 42 billion dollars in debt and yes you read that right, billion and not million.

Many people find Barak Obama charismatic which I personally don’t but I do believe that he is very smart.

But is he smart enough to save capitalism?

In January, Obama will gain the authority to run the government of the United States of America, but its presidents cannot simply remain charismatic symbols but must also tackle its problems and America and the world have many of them right now.

When Obama began his journey to the presidency, the war in Iraq was first and foremost in a great many people’s minds but that is no longer the case and he will be judged by how he handles the world’s economic crisis.

The U.S. is still by far the biggest driving force behind the world’s economy so Obama’s first task will be to restore confidence to Americans who are deeply pessimistic about their near future!

People are not borrowing and most financial institutions aren’t lending and if that doesn’t change then the economy is doomed as perhaps it was from its inception?!

Simply exuding confidence will not be enough regardless of how much charisma you have and Obama may be forced to reform the system itself.

In recent months the U.S. government has taken on a huge number of obligations in the private sector …

Ownership in banks.

Guarantees of commercial debts.

And loans to the automobile industry.

Sadly and perhaps most seriously no exit strategy exists and the Obama administration will have to find one because that is exactly what it will be judged on!

Related posts:

1. Why Are So Many People Feeling Optimistic!
2. Finance Ministers Pledge To Get Their Banks Lending Again
3. The Banks Are Now Indebted to Governments
4. The U.S. And The E.U. Are On An Economic Collision Course.
5. Supposing Obama Follows In Rice’s Footsteps