The notion that everyone should have to save money for emergencies and future needs has always been unromantic and wearisome. Unfortunately, this distaste for saving for a rainy day now extends to our government. A few partisans will use our failure to live within our means to show that once fiscally conservative Republicans have behaved worse than most once in power. Most of us will notice only the effects much later and wonder how we got so screwed.

"It should be realized, however, that the existing liquidity deluge in the United States and some other countries has its sole source in the monstrous asset bubbles providing the collateral for virtually limitless borrowing. It needs a sharp distinction between earned liquidity from saving and borrowed liquidity accrued from asset bubbles. The latter kind of liquidity can vanish overnight." - Kurt Richebächer, PhD

That the USA will plummet in economic and political value seems a foregone conclusion. What happens after that dazzles me. Will the Democrats become the new party of fiscal responsibility? Will both parties follow England's example and hone their debating skills rather than do anything useful? Sadly, the latter eventuality seems more likely. Will enough Chinese, Chilean, Thai and Korean stocks list on US exchanges before then? That seems the only question worth asking.

The last advantage over the world owned by the USA seems to be capital allocation. The question becomes whether enough of us will be able to participate to maintain political stability. Hard to believe that Mexico might pass us in my lifetime as a world economy. Harder still to think of a reason why not.