If you're talking about me, I was actually talking about our own economy.

I repeat: we've been through far, far worse. Reconstruction, the Great Depression, Stagflation...loads of personal debts, mortgage crises, energy crises, hostilities abroad, none of this is new, and none of what we're going through now is anywhere near as severe as it was in the thirties or seventies. We survived then, we'll survive now.

Although I'm curious as to why you're so certain that things are only going to get gloomier. Not to attack you personally or anything, but what exactly is it about now that you think will bring us down?

The national debt is the biggest of all our problems. Watch IOUSA when it comes out to get a good explanation of the problem. I've explained it way too many times to want to do it again now and have most people ignore it.

The energy problem at least has the potential to be solved. We can go nuclear to satisfy our standing energy needs, and we can make electric cars so that we don't have to rely on fossil fuels for our cars and can use whatever kind of energy we want, fossil, renewable, or nuclear.

But that second hurdle is going to be a lot harder to jump unless Congress passes some strict legislation or goes out of its way to support non-gasoline based cars.

The national debt.  It will cripple our economy in the next few decades.  Our currency will simultaneously inflate and depreciate, thus hurting our position throughout the world market.  The infinite line of credit we have written for ourselves (as well as the ludicrous amount of outstanding debt held by the public) will all come crashing down once our national debt gets too high.

I'll just point out two things:

1- The US (and the world) has endured hardship in the past, but that doesn't mean a combination of factors can't cause significant damage. Many countries are starting to see a depression combined with stagflation plus credit crisis, and the start of an energy crisis. That's not something we've seen before, I believe.

2- The more the economy advances, the more sensitive it can potentially be to disruption. The system gets more and more sensitive as time goes by. Resilience is not in today's vocabulary, it's all Just-in-Time inventory based. Look at fuel supplies for the next few weeks as an example.

 I don't think things are only going to get gloomier, I think things will eventually go up again (as I stated in an earlier post, how it's the nature of a free market), however I also think things are going to get worse before you get better.

As for what I think is going to happen that can bring you down. Well, just exactly what's going on now. The credit crunch will claim more banks and such. Meanwhile, the rising oil prices will keep raising the costs of goods and services. The rise in cost of goods and services means that less people will be able to afford to pay them, this means that companies will need to downsize to keep profitable, this means that unemployment goes up, which means that now even less money can be spent on goods and services.

It's basically the reverse of the cycle of prosperity.

I think Nero will make a great new Emperor for Rome. He is emotionally stable and fiscally responsible!

As for the titanic analogy... Nobody saw the iceberg coming until it was too late. Even then the iron hull should have protected it but because of a flaw in forging it was cut like butter.

I like the think of the USA as slice of bacon. It only gets better as it gets crispier. Then it just turns into dust. But out of that you get bacon salt!

 Bacon salt would really irritate cuts and graises.

Granted that the national debt will pose a massive problem, but I see nothing about it that's not insurmountable. It's certainly been higher, both in relative and absolute terms (again, the 70's spring to mind). Note that under the Clinton Administration we were able to eliminate a national debt that was roughly on par with what we're now experiencing. Note also that we're currently spending tens of billions of dollars on Iraq: eliminating that revenue drain will prove to be a massive aid for combatting our national debt (although unfortunately the earliest that will happen is in mid-2009).

No, the biggest problem we face does not have to do with energy (as you yourself addressed) or the national debt (not directly, anyways). Instead, our hurdle is the Baby Boomers, who are set to retire very, very soon in large numbers. Fortunately for us, we've been replenishing our population via immigration and the birth rate, so we won't be hit as hard as Japan or Europe in this regard. Unfortunately, politics being what it is, we're also committing massive amounts of resources towards the elderly already, and that commitment will only deepen as time goes on. In short, we have a political problem coming up very shortly.

Fortunately, political problems can be fixed politically; tighten our belts appropriately, and the damage won't be overwhelming. I believe that the political capital required to do so won't show up for a few more years, unfortunately, but I do believe it will appear before the damage proves irreversible.

Fair enough, and for what it's worth I agree with your short-term view. I was speaking of the long-term outlook, and I erroneously assumed you were as well. My apologies.