COMMENT All we really know about America’s several financial industry bail-outs and the stimulus plan is their enormous potential cost: at least $1,000bn in net cost to the Treasury for the bail-outs, another $1,000bn for stimulus and likely additional trillions of costly credit offered by the Federal Reserve.
These commitments will sharply curtail the ability of President Barack Obama to push for investment spending, healthcare and entitlements reform and middle-class tax cuts. They will further explode our federal debt and borrowing costs and increase our reliance on foreign capital. That will affect our economic security: the nations with increased financial leverage – China, Japan and the oil-producing countries – are already demanding more assurances about our creditworthiness as the world’s largest debtor nation. A recent commentary in the Chinese People’s Daily noted: “The world needs to create a diversified currency and financial system ... that is not dependent on the United States.”
