recession. All the things you mentioned that concern you are related and almost a vicious circle. If people don't have money they can't spend. They can't spend it on cars that generate sales revenue for state governments. Then you have the problem of oil prices eating up more income providing even fewer household dollars for spending which makes the states revenue issues worse. Not to mention the problems with states that rely heavily on real estate property taxes are being hurt because of decreases in property values.

This recession seems to be made up of continuing vicious circles that are extremely hard to break.

address the current account 'unbalance' and encourage China to invest/spend more domestically. WTF!?!, if true, who do we think we are to try and tell China what it should do economically. China is king of the world right now because it saving rate which may be too high. But I much rather be in China's position then our right now.

Savings is king.

I believe the American automakers blow it in the 1970s by not responding to competition from Japanese automakers.

Japanese automakers captured market share mainly through price and perceived quality differences. I sometimes think that there was unwritten rule with American automakers that they could not build a car to last more than five years because they wanted people to comeback and buy another.

American automakers troubles are a result of absolutely poor management.

I heard an interesting commentary:
The USG contributed to GM's bankruptcy by maintaining cheap gas in the U.S. European and Asian governments promoted small energy efficient cars by taxing gasoline so high that consumers found smaller cars appealing.
The commentary didn't even mention the tax breaks for SUV's.

Thank you for the kind remarks.

When I speak of hope above, it is the hope that somehow the very system that has caused and then bequeathed us these horrors - a system whose publically advertised "democratic processes" have become so subverted by an unprincipled collusion between lobbying interests intent on controlling them on the one hand and politicians eager to be owned by these same interests on the other - is brought to an end. Ask yourself how representative of the peoples' sentiments an almost unanimous congressional vote to endorse an AIPAC authored resolution setting up the preconditions for war with Iran was last year. As long as AIPAC and the financial and defense lobbies can determine who holds office in Washington, you and I can't. To call the present system as corrupt as it is in this way a "parliamentary democracy" is utter nonsense. The whole affair needs to be set aside and rebuilt from the ground up. Perhaps our 30 year old schlub in Canton together with hundreds of thousands of others like him will see to that happening prior to any upcoming levying of new taxes. Can we hope?

I am not so optimistic.

From the The Economist

The same old dilemma will eventually occur. Having spent a fortune bailing out their banks, Western governments will have to pay a price in terms of higher taxes to meet the interest on that debt. In the case of countries (like Britain and America) that have trade as well as budget deficits, those higher taxes will be needed to meet the claims of foreign creditors. 

The working class schlub and especially his 3 kids will be paying a fortune in taxes before they realize they have been robbed.

I'm not so familiar with the 400 year cycle. The appeal of the K-wave is that it has already been tested in real time, twice, after publication of the book, and it has worked both times.

By this time, most of the cash freed-up by the sale of equities made during last year's crash has been committed to some format or other, governments, very short term corporate paper where attractive enough, etc. It seems to me that the only buyers of substance still out there are likely to be foreign government entitites. To get these players to the table given the obvious begging inherent in such large offerings will require yields significantly higher than were contemplated originally.

While I've not been critical of fiscal stimuli in principle understanding going in that choices are being made which just might by accident actually favor the little guy in the few instances when pork isn't involved, the cost of the pork to achieve this result ultimately will be quite damaging. Keep in mind always that we've turned management of these questions over to thieves and must therefore expect the morality of thieves to guide the processes involved. Strange as it may seem on its face at the moment, I would expect to see much higher interest rates in the near term coupled with an early return to $4.00/gallon gas prices. And guess whose teat gets caught in that ringer? It won't be Dr. Scalple, Director of Surgery at Johns Hopkins. Dr. Scalple's services will still be in demand enough and Dr. Scalple personally will be able to sound professorial enough to hold on to his inflation proof, $350,000 annual salary. Nope, it'll be some high school educated, 30 year old, white working class schlub with a wife and three kids in Canton, Ohio, laid-off from his job at the local aluminum fabricating plant a year ago and currently delivering pizzas in an economy car on Cavs game nights. That's when things will really start to hurt and a lot of today's public willingness to acquiese in this criminality will come to an end. Hope begins at that point.

Exploding debt threatens America John Taylor.

Under President Barack Obama’s budget plan, the federal debt is exploding. To be precise, it is rising – and will continue to rise – much faster than gross domestic product, a measure of America’s ability to service it. The federal debt was equivalent to 41 per cent of GDP at the end of 2008; the Congressional Budget Office projects it will increase to 82 per cent of GDP in 10 years. With no change in policy, it could hit 100 per cent of GDP in just another five years.

He is saying the deficit is a much larger threat to the U.S. as well as global economy than the actual financial crisis.