Balance the Budget

Republicans and Democrats are fighting like dogs over a bone to have their way in the Great Budget War of 2011.  Democrats agree that we spend too much and that cuts must be made to programs.  Republicans are barking, “BALANCE THE BUDGET! NO NEW TAXES!”  In a perfect world that would be wonderful and productive.

However,  expecting to balance the US budget like we balance our budgets at home is just naive.  It isn’t like balancing a checkbook.  It’s much more complex.  Our economy is a world-class and what we do affects markets worldwide.  If we default, other countries don’t get their money.

Those countries are entitled to their money, so instead of the money they just take possession of that amount of the US.  That’s how bankruptcy works.  You default on your loan, the bank takes your collateral.

And that’s how China gets control of the United States of America.  We give it to them.

Right now the US Dollar is the world’s currency.  If you want to buy oil, you have to purchase US Dollars to do it.  Asia, Europe, Australia and folks on all other continents must purchase dollars from us to buy oil, wheat, technology, and other commodities.  This keeps us in a position of control in the world economy.  This is determined by the International Monetary Fund (IMF).

Recently, though, Dominique Strauss-Khan the head of the IMF was arrested in New York on charges of sexual misconduct at his hotel.  While this was being worked out, he was removed as head of the IMF and Christine Lagarde was put in his place.  Will Lagarde be as staunch a supporter of the dollar as Strauss-Khan was?  Let’s hope so.  Because if our dollar loses it’s place in the world’s markets, our economy will plummet to third world country status.  And just like that we’ll be buying Chinese Yuan to buy oil and gas.  An prices will skyrocket.