Sunday Morning

Don't take it from me that the U.S.'s binge-spending party is over. Take it from Brad Setser:

Adjustment -- real adjustment -- requires a sustained period when US consumption grows more slowly than the overall economy. That would lead US savings to rise, and reduce the United States need to borrow from the rest of the world. That change, in turn, implies that consumption outside the US would need to grow more rapidly than income. The rest of the world will no longer be able to draw on US demand to support growth; rather, the US will need to draw on global demand to support US growth...US consumption needs grow more slowly than US income for a while. And in the emerging world, consumption will need to exceed income growth.

Right now the U.S. is like a drunken frat house that just partied until the break of dawn, then didn't want to admit the party was over, so just kept partying even though the house was wrecked. We maxed out our credit cards. We took out mortgages we couldn't afford and then borrowed money against the houses. We elected (Republican) leaders who neglected investment and infrastructure and borrowed trillions of dollars from China. We bought giant heavy inefficient stupid-looking cars. We bought giant stupid-looking houses in hideously ugly pre-planned "communities" that could only be reached with our giant stupid-looking cars. Now all that debt has come due, and we have no way to pay it except by being poorer than our parents.

One time, the Sunday morning after a party at my college dorm, we were cleaning up the party cups and dumping the last trickles of alcohol into one big bucket. Then suddenly, yelling that the party wasn't over, a guy ran up and grabbed the bucket and chugged it down.

The United States under Bush has been "that guy." But even for "that guy," the party has to end sometime. And that time is now.