Global Markets Plunge

The markets were closed Monday in the U.S. in observance of Martin Luther King Day. However, global markets reacted Monday by falling sharply. Loses were so bad that trading needed to be halted on the Indian and Korean exchanges.

First of all, a correction was inevitable. The U.S. financial market issued large amounts of bad debt. Everyone knows these debts were bad. The foreign markets are reacting to loses they foresee happening in the U.S. market.

Second, it is a reaction of Bush’s “shot in the arm” economic plan. Basically to give people short-term tax breaks costing the U.S. government $140 to $150 billion. The foreign markets do not believe this will stave off a recession, and I agree with them.

There are solutions to the problem, curtail the black hole that is defense spending and the Iraq War and use that money to directly invest in American infrastructure while paying down the national deficit and a small portion of the debt. However, there is no way President Bush will ever endorse such a package. He still believes that giving money to rich people is a way to stimulate an economy, despite the fact they spend far lower percentage of their income. So in all, I would plan for a really bad year.