A note about the housing bubble is that the government did incentivize banks to hand out loans to people that couldn't afford them. Look into Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as well as the Community Reinvestment Act of 1995.

Bubbles can indeed be natural, like the .com boom and bust of the late 90's. However, the government can create artificial bubbles by screwing the system up.

I'd like to discuss the world police issue.  You feel that we don't "police" the world.  Sure USA should make sure that it isn't hampered economically throughout the world but having a troop presence in 100 plus countries doesn't make too much sense to me.  Sure we needed bases after WW2 in Europe to deter the Soviet Union.  Sure we need bases in South Korea because technically they are still at war (just have a cease fire agreement).  Other than that I see no need for the amount bases we have in other countries especially in the Middle East. 

How would you like it if some Arab nation started putting bases in Mexico, Canada or USA?  I can see why there is USA resentment throughout the world and especially in the Middle East.  Pretty much Osama wanted Americans to leave the Middle East and I have to say I agree with him on that aspect.  We acted like the world police when we invaded Iraq based on pure bs propaganda spewed out by Cheney, Rumsfeld, and Bush.  Even when they were proven wrong by other intelligence they kept saying the propaganda.   There was zero reason to go into Iraq besides Cheney, Rumsfeld, Bush and a few others wanting to.  It distracted us from Afghanistan and prolonged that war.   We've interfered with many nations and usually that nations turns out worse than before we interfered. 

Iran was an actual democracy before.  However in 1953 when BP was about to lose it's oil rights in Iran due to Mohammad Mosaddegh wanting to nationalize the oil in Iran the CIA stepped in and pretty much made things worse.  We supported Osama when he was fighting the Russian then look how that turned out.  We supported Saddam (giving him weapons of mass destruction) to fight against Iran and look where that ended up.  We need to stop meddling in other countries affairs because we don't have a very good tract record.  The only thing USA has done right recently would be the first Gulf War and WW2.  I suppose you could make a case for Korean War except that General MacArthur got a little too close to China's borders.  South Korea is definitely better than North Korea though.  So we helped Kuwait, South Korea, and semi help stop the genocide in the Kosovo War.  What about the genocide in Sudan?  I guess Iraq was more important to get involved in than an actual genocide. 

I support sending troops (with a coalition) to help prevent genocides but to interfere with a country just because they have a dictatorship or a company is about to lose resources due to nationalization isn't a good reason.  Sending troops should be limited to sending it against nations that attack us, helping allies that get attacked, and help prevent genocide with a coalition.

There is a difference between a regular bubble and a bubble fueled by the fed.

The main difference being a regular bubble isn't going to get big enough to screw the economy on a large level when you have a diversified economy.

When you've got the fed though.  They more often then not offer an excess of credit, that doesn't exist.

Which leads to bubbles getting bigger... and worse bubbles not being backed by real assets.

A bubble bursting is no issue if we have the money to pay for that burst... howeever if we don't.

I'm glad I saw this before I had to leave, I'd be able to give you less time otherwise. 

I'll start off with a throat clearing then; there are some countries that I too cannot understand why the US is there, I wrote a piece recently and then saw it repeated later on, on the relevance of NATO. (Which I am in support of for various reasons holding true to it's original mission.) But I can't see why we have a base for instance in Germany.

Well your second paragraph was poorly phrased, I can take a guess that the spirit of the paragraph was to give a human perspective on what the general train of thought is in the middle east. I'm sorry then I don't like arguing against psychological mistakes, these people don't 'all' (at least) think like you do.

You made four assumable points in this paragraph (one from another paragraph) though.

1. That the US put Saddam in power.
2. That the US should have ignored Iraq for Afghanistan.
3. That the US should have pulled out of Iraq
4. That the peoples of Iraq (the middle east all uniformly are at least offended by our troops being there.)

If any of those points aren't fair to represent the respective parts of your argument then feel free to let me know.

Firstly, the US did not put Saddam in power, the grammar of the statement is very wrong, we supported his regime under the Reagan administration and this was not the same as keeping him in power. If you care to know at least some of the story it goes like this in cliff notes.

Saddam worked with the then Socialist Baath party (1960's)to the assassination of Abdul Qassim who prior to that had successfully assassinated King Faisal II the result was a vice president of Iraq in the form of a ambitious Saddam Hussein, this was already a dictatorial presidency. During this time (1970's) Hussein put up various safe guards to support his next move to become President and over throw the already sickly Ahmad Hassan al-Bakr, with him out of the way Saddam was then exercising his iron grip over the Iraqi people. It would be a turn of phrase to say the US put him in power but a slanderous one at that.

The second issue is why I can't argue that the US kept Saddam in power - he used weapons not of U.S. make.  I remember that the White House was in arms at the gassing... I guess I'll do a quick refresher on this as well.

Up to Kuwait Saddam Hussein had US support it comes as no surprise that at the end of the Cold War he would pull a move like that, all the while claiming the US gave him authority to annex Kuwait. It's well recorded that the US impression was Saddam wanted to square his border which it turned out his intent was to annex Kuwait all together claiming curved drilling from Iraqi oil supplies. US policy after that point had always been to wait for him to start the show, and note all the proceeding sanctions and boo on the US for trying to stop the killing of Kuwaitis with American dollars and blood. The point is the proxy was a megalomaniac and his people generally feared reprisals those that didn't were killed or exiled.

Now with that said, the worry at the start of the war was that he still had weapons that we knew he used already on Kuwaitis and on American soldiers during operation desert storm. It is a fact that even up to his hanging he refused to let UN inspectors see if he did have WMD's. The nonsense argument being the US had them, while ignoring the pragmatic difference of the US not wanting to use them. As I said before; up to that time the US had not engaged Saddam's regime first and honestly his removal was a long time coming anyway. The threat of another unexpected move by Saddam was too much to risk when war resources are already in play in Afghanistan.

"The best defense is a strong offense." Might be the most concise and apt way to put it. There is a strategy here that I hope you can appreciate.

The third I posted before on this forum on why we couldn't leave without securing the stability of Iraq, while Afghanistan may not have been a result of US policy on it's own the US didn't help the situation by leaving or even engaging without the intent of stabilizing the region(1970's), but it does serve to show how a country can become a nest for barbarism and Iraq had all the early symptoms. If your a guest in someones home I'd hope you'd fix the bed before you leave, it may never be the same as before you slept in it but at least you gave it a shot.

For three you can search my posts on Iraq, it's not too far back, but I don't feel like looking for it or even worse typing it again. (I'm in a rush now)

The fourth is something that has to be broken down on when we pulled out hypothetically.

If we pulled out before Saddam was removed or before Uday and Qusay Hussein were killed then the death toll would have been higher, the international cost would of been far more devastating. Again I've played this scenario out in another post already.

Now note, that the US had every legal right to invade the country of Iraq by international law. The Geneva accord which is meant to protect a nations sovereignty has four mentionable cases that sovereignty can be revoked. It's should be noted that all except one of these cases require diplomacy and do not call for offensive military action at least not on their own merit, one of them demands immediate military action though.

1. The illegal invasion/annexation of a sovereign country
2. Crimes against humanity
3. The usage of unsanctioned WMD's
4. Genocide

Now of all of these Genocide is the only that requires immediate action taken to prevent or stop the crime using military force if need be. Saddam was guilty of all of these.

Now to say Iraq was in no way tied to our efforts against bin Laden/ Al Qaeda and believe such nonsense would demand you ignore:

Abu Musab al-Zarqawi: Who had been protected and encouraged by Saddam's regime and after the reign of Saddam Hussein and his two sons decided to champion the cause of terror that Saddam had exported to western countries around the world before the words "Iraq War" may have been a notion in the mind of Clinton or Bush. He and most of his senior Baath party cronies were killed by the US Army.

Ramzi Yousef and Eyad Ismoil: Both arms the Iraqi government Yousef who received shelter by Saddam Hussein himself.

The endorsement of terror in monetary sums by Hussein supporting the attempted poisoning of Britain's water supply with rice. (I can't remember who the conspirators were.)

And do not forget these things when you write that the US should not have engaged Saddam Hussein, or else then you tell me that I should accept a logic of sadomasochism as my truth most absentmindedly.

I wish I could continue but I have to get going, I'll respond to the rest later if you want me to.

5. has always been necessary due to 1) Cold war 2) other US interests.

Now... well the US get hate from everyone whatever they do, If they intervene, they are the big evil country that invades, if they don't, they are the big evil country that let people down.

I do think that the US should start to be a lot more selfish in their foreign interventions... let people deal with the consequences fo their own inaction (as long as US interests are barely hurt in the process).

@dib8rman, I can see your points for the invasion (due to past gassing of the Kurds, Iranians, etc).  In my opinion Saddam was zero threat.  The first Gulf War clearly showed that Iraq was no match for USA or the coalition.  They were stomped and it would have been foolish for Saddam to think they he could start another war and actually win.

I'll go over the assumptions you made of me:

1. That the US put Saddam in power.  - I never really stated this just stated that USA helped Iraq during the Iran/Iraq war.  Which USA provided Iraq with weapons (I couldn't find any info that USA provided Iraq with WMDs or nerve gasses except I did find this in Wiki...

"Despite the removal of Saddam and his regime by American forces, there is deep resentment and anger in Iran that it was Western nations that helped Iraq develop and direct its chemical weapons arsenal in the first place and that the world did nothing to punish Iraq for its use of chemical weapons throughout the war.[citation needed] For example, the United States and the UK blocked condemnation of Iraq's known chemical weapons attacks at the UN Security Council. No resolution was passed during the war that specifically criticized Iraq's use of chemical weapons, despite the wishes of the majority to condemn this use. On March 21, 1986 the United Nation Security Council recognized that "chemical weapons on many occasions have been used by Iraqi forces against Iranian forces"; this statement was opposed by the United States, the sole country to vote against it in the Security Council (the UK abstained)"

So basically the USA at that time didn't give a shit that Iraq used chemical weapons against Iran due to USA fearing Iran more at the time.  Sounds a little hypocritical doesn't?  To pretty much deny or brush aside the issue during the 80s yet somehow over a decade after Desert Storm it is worth a war over?

2. That the US should have ignored Iraq for Afghanistan.  - They should have just stuck in Afghanistan was my argument.  We should have never gone to Iraq in the first place.  North Korea developed nukes and we didn't invade them.  Iran is still trying to develop nukes.  Israel would probably just do another strike like they did against Iraq in 81 if they felt Iraq or Iran was about to have a nuke.

3. That the US should have pulled out of Iraq - Never really stated that.  Once we f'd everything up by going in there we had no choice but to stay till things were least semi cleared up. 

4. That the peoples of Iraq (the middle east all uniformly are at least offended by our troops being there.) - Osama main mission was to drive US out of Saudi Arabia and surrounding Middle East.  Sure there are people in the Middle East that want USA there.  However, there are a lot of people that are angry with USA presence.  Pretty much they are offended by it as much as the Crusades.  Middle East in my opinion is only on the radar because of oil.  If USA was smart we would get ourselves off the ancient tech known as fossil fuels then we really wouldn't have to worry about the Middle East at all (besides protecting Israel if it is attacked). 

The best defense is a good offense.  -  So how did Iraq pose a threat when they wouldn't disclose if they had more WMDs?  North Korea and Iran were doing the same thing.  I guess Iraq was just an easier pill to swallow?

My main argument I was trying to make with that rant was that USA needs to stop meddling into other countries affairs.  We don't have a good track record (Vietnam, Iraq, Iran, etc).  Most of the times the country ends up worse than before we started meddling around with it either with CIA or military.  We have no right to chose which government system is better for another country.  If another country wants democracy then they can rise up and revolt themselves.  A democratic nation should only go to war if they are attacked, allies are attacked, or to prevent genocide.  To my knowledge Iraq did none of these before the recent war except for genocide and that was back in the late 80s (which we eventually went to war with them during the first Gulf War). 

Let me leave you with this.  The war on terror will not be won by the barrel of a gun (just like the war on drugs will not be won by putting people in jail, quite frankly you can never win either of those wars so we find ourselves in a permanent war which allows our freedoms to be slowly stripped away).  It can only be "won" through proper education.  A human isn't born to hate.  Hate is taught in the "schools" of Middle East, family members, peers and "mosques".  Instead of spending countless billions dropping bombs (killing people that have relatives which turns more people into hating you) we should spend that money to help out the Middle Eastern countries education system (USA education system needs help also).  Give them a proper education that doesn't teach them to hate Jews or Americans.  That is the best offense.... Education.

Anyways, I'll try and respond more to your post later.  I'd like to hear more of your responses.

Sorry about the late reply... wanted to research this.

I'd disagree honestly... it only looks that way because of all the flags in the middle.  From 2003 onwards the growth is very small.  Hence why I think the above chart was better.

What happened in 2003 that might of stunted the growth?   I'm not really sure.  Hence how long it took.

There was the 2003 Healthcare Modernization Act.  Which could be a culprit.  It was mostly a bill about expanding coverage for seniors, but it might of been when we stopped the automatic "bumps" in medicare spending. 

Though if so... we should see costs take a huge bump soon, as part of the deal to get the new healthcare law passed was to greatly increase what we pay medicare doctors.

It's hard to say because I can't find any good charts on the matter.  They all have those ridiculious "In 50 years we'll be paying this % of GDP!"  which is folly because... who even freaking knows what our GDP growth will be like?

Most economists couldn't predict a giant depression weeks before it happened... yet they can tell me what our GDP will be in 2052?

As for what caused the big spike from 2000-2003.

A number of Healtcare bills passed that increased government spending on healthcare and government departments that study healthcare.

Some other interesting numbers...

About ten percent of people account for 63% of spending on health services; 21% of health spending is for only 1% of the population.  At the other end of the spectrum, the one-half of the population with the lowest health spending accounts for just over 3% of spending.

Those are some awful statistics...