Nobody, that is, except the International Monetary Fund. The IMF issued a report warning that the foreign debt being run up by the US with its twin budget and trade deficits is of such a magnitude as to threaten financial stability world wide. Add to that dollar’s erosion in value of 25% in the past year and a half and the picture becomes even starker. The IMF warned that underfunded Social Security and Medicare obligations point to shortages of $47 Trillion over the next 70 years. That figure is 5 times the current gross domestic product. Some see this as a replay of the 1980s when Reagan tax cuts and deficit spending dropped the United States from the world’s largest creditor nation to the world’s biggest debtor nation.

Each week 70,000 formerly employed middle class Americans lose their unemployment compensation benefits and their status as unemployed workers. When the benefits run out they are no longer unemployed but become “discouraged workers”. They don’t have jobs; they don’t have incomes; but they don’t count when the Labor Department figures the unemployment rate.

The Bush administration defends its policies, of course, pointing to the stock market recovery as proof of the wisdom of its borrow and spend policies. Those tax cuts, they claim, stimulated investment, especially in small business, which can be counted to work its way down through the economy. Small business and the entrepreneurial spirit can be counted on to erase the red ink and get America back in the black. 40% of all long term lending to small business operators is backed by the Small Business Administration’s 7(a) loan guarantee program. That program is the traditional source of investment in plant and job expansion. Just three months into the current fiscal year the SBA ran out of money and suspended the loan guarantee program. Applications already in the pipeline are being cancelled and new applications are being returned to the borrowers. The SBA blames the Republican controlled Congress for failing to enact funding to continue operation of the program.

In effect the Bush Administration is pressing on the accelerator while the Republican Congress is standing on the brake pedal. The engine is revving up but the vehicle isn’t moving. Soccer Moms may not understand what that means, but NASCAR Dads do. Do it long enough and the engine blows - spilling oil all over. It is not just the President’s political opponents that are waving the yellow flag. It is the international finance community that is pointing to the hazard on the track.

The warnings aren’t being sounded because of temporary conditions brought about be the swings and that the business cycle will smooth over. The dangers they are warning of are structural and can’t be corrected by more of the same spend and borrow fiscal policies. Continue as we are and the Whitehouse spin will send us into the wall.