Is America making the same mistakes that led to a world wide economic depression and is the dollar no longer the premier global currency.

(Many of my post are repeating themselves.) According to a new pamphlet published by the institute for economic affairs--the answer is yes, "Barack Obama is committing the same mistakes made by policymakers during the Great Depression, according to a new study endorsed by Nobel laureate James Buchanan." (You can read the full document here.) I guess the fact that the study is endorsed by a Nobel Laureate makes this a credible statement. It goes on to say that, "His policies even have the potential to consign the US to a similar fate as Argentina, which suffered a painful and humiliating slide from first to Third World status last century, the paper says." Although the country is headed down this path, I don't think things will get that bad. premier

Government spending money to solve the economic situation will hurt the economy in the long run. "In particular, the authors, economists Charles Rowley of George Mason University and Nathanael Smith of the Locke Institute, claim that the White House's plans to pour hundreds of billions of dollars of cash into the economy will undermine it in the long run. They say that by employing deficit spending and increased state intervention President Obama will ultimately hamper the long-term growth potential of the US economy and may risk delaying full economic recovery by several years." There is no doubt that the current economic policies are designed to purposely hurt the economy for the purpose of remaking it and America.

The current economic policies being carried out are comparable to what FDR did, and his policies hurt the economy and delayed economic recovery. "The study represents a challenge to the widely held view that Keynesian fiscal policies helped the US recover from the Depression which started in the early 1930s. The authors say: "[Franklin D Roosevelt's] interventionist policies and draconian tax increases delayed full economic recovery by several years by exacerbating a climate of pessimistic expectations that drove down private capital formation and household consumption to unprecedented lows." If one reads _The forgotten Man_, by Amity Shlaes, one can see how the policies of Hoover and FDR hurt the economy and how the Great Depression was directly caused and exacerbated by government policies. As a result of the economic troubles of that time; the government increased its size and influence in the free market, much like the government is doing now.

The report states how the current economic policies will lead to a bleak economic future. "The prognosis is catastrophic if[IF] projected government policies are not cut back. According to the White House's own estimates, the federal budget deficit in 2009 will be $1.6 trillion, approximately 11.2pc of the overall economy, the highest on record since the end of the Second World War. In 2019, the national debt will represent 76.5pc of the US national economy, the highest proportion since just after the Second World War. In such circumstances, the international reserve status of the US dollar will not survive. As it fades, so interest rates on government securities will rise and the real burden of servicing the debt will increase. In such circumstances, the US economy will teeter on the edge of a black hole." This level of debt will have negative effects on the economy. China and Russia have already called for a new reserve currency to replace the dollar. China, a communist country, has expressed concerns, to the point of laughing at our Treasury Secretary, over the value and safety of their investments in U.S. dollars due to the U.S. printing and spending huge sums of money. These two countries are not the only ones calling for the dollar to be replaced.

In response to countries running up huge deficits, the UN is now calling for a new global currency to replace the dollar." The dollar should be replaced with a global currency, the United Nations has said, proposing the biggest overhaul of the world's monetary system since the Second World War." The article states that this call is in response to "the potential of countries running large deficits and would help stability." This is an interesting effect of the current global economic situation--a more unified global economy, an increase in the powers of international regulatory bodies, and America's decline of its influence on the world stage. The dollar's days are numbered. A new shift is taking place, I don't have any better words to state this better. Maybe somebody with knowledge of foreign affairs would know more about this.

This all could not be true. The current mild economic crises led to people choosing the current government. If there is some huge economic trouble in the future, how would people react? I like "Doctor Dooms'" take on the current economic situation. "Pessimism porn". Anyways, more of the same.