Political Science - international relations Essay

Political Science - international relations - Essay Example America is presently on course for an economic meltdown at the same time the EU and China are thriving. This trend is expected to continue unless drastic steps are taken immediately but much the same as the global warming crisis; the self-inflicted damage has already been done and may not be completely reversible. The current President Bush administration cut the taxes of the rich while increasing military expenditures on The War on Terror, invasions of Iraq and Afghanistan and the rebuilding of those countries. The debt has now exceeded even the Reagan administration’s record levels. It has severely hampered America’s ability to continue to effectively defend itself and will cripple it economically for many years to come. (Suter, 2004). In this time of increased globalization of the world’s financial markets, American legislators are more easily able to borrow from other countries that are experiencing a surplus of money. The United States is regarded as a good investment and has an unlimited ability to secure loans without a problem, but loans must be paid back, with interest. China and other countries own a large piece of America, a potentially disastrous prospect. For example, in February of 2005 the nation’s seventh largest creditor with $53 Billion in holding s, the Bank of Korea, revealed that it intended to â€Å"diversify reserves out of U.S. dollars† (Hirose, 2005). The Dow Jones dropped 174 points and the dollar lost significant value that same day. What if tomorrow, a major U.S. creditor lost confidence in this nation’s ability to honor the debt or decided to exert political influence by means of economic threats related to the debt? (â€Å"America’s Foreign Owners†, 2006). What if they all united against the U.S.? It probably won’t happen anytime soon but the fact that it could happen should be enough to alert Congress to the crisis. One or a combination of creditor countries could cause a sudden and