But the world is pegged on our economy.
Not necessarily so. The world market might work better in conjunction with a healthy US economy, but in order for the US to have the impact on the world it used to, it must have something to give it.
The US has only 30% of it's manufacturing base left. The rest of the jobs are for the most part in the service sector which does not have any trade value relatively speaking. Education levels in the USA are poor in comparison to other industrialized nations and the high cost of that education makes it harder for students to compete globally. They are saddled with debt from the beginning whereas most of the top countries have education programs paid for by tax dollars, that not only encourage and motivate those who wish to go to college or university, but also put their own citizens ahead of the game financially.
China and India had tremendous growth in the past few years. The big multi national companies that used to link themselves to the USA are now not willing to sit still any longer when they see money to be made in another country. They've been pulling out of this country for years and there is no longer any loyalty to the USA. Investments on the part of the USA have been shoddy. The global markets have watched trillions of dollars in debt being created by the Bush administration, with most of that debt backed by China. Russia has massive oil reserves that they are now willing to sell around the world and for euro's -not the American dollar. This further erodes the dollar on the market. China, India and Russia are now looking to invest in Africa - not so much in the USA. Major banks in the USA just lately have had shares sold to foreign holders - all of this means there is no 'made in America' nor 'owned by America'.
My prediction is that the USA will limp along - the Bush plan to help out by cutting taxes and handing out checks, will buy some relief - but I think it's well planned. The crunch should hit just before he leaves office so that the next administration won't be able to fix it fast enough for all the rags to tell the world that the Democrats have failed in their policies. The next crunch in the subprime housing is supposed to come in the spring, so that will further erode that market. There are countries around the world that already own some of your US roads, if more of the State governments don't have enough revenue from property taxes, federal funding, sales tax etc in order to maintain their services, more of your 'owned' resources will be sold off to private enterprises. Once that happens........sammieswife.
