LaRouche: State of the Union Address, 2003

- The Economic Collapse -
page 9

- The Economic Collapse -

Now, what I shall do, is cover four topical areas of our state of the union. The first, the causes and the nature of the present economic crisis. Secondly, the emergency recovery measures which must be taken beginning right now--not in the future, not in the next election, {now, while this President is sitting in the White House}. Third, the global strategic conflicts which overlap this economic crisis. Fourth, some measures which must be taken to correct the potentially fatal blunders which have been included under the panic-stricken, misguiding notions of ``homeland defense.''

Now first, then, to the economic crisis.

As I've said, this nation is disintegrating economically as a result of a financial and monetary system which has come to its terminal phase. This system is over. This system is bankrupt. The amount of debt in the world system--remember, we're talking about a world economy which is popularly estimated at about $40 trillion-equivalent, annual accumulated net product. How much debt do you think there is in the world? How much short-term debt, like derivatives debt, in addition to long-term debt? How many housing bubbles in the United States are about to collapse?

What probably has made--people have lost their jobs; they lose their houses; and the value of the property is maybe one-third of what it's listed at mortgage value now. Happening very rapidly in the Greater Washington area. Look at the bubble out there. Look at the highway from Washington to Dulles irport]. That's a ghost-town. They're looking for some fellas with six-shooters to stand out there, as the cowboys, to introduce the local visitors to the ghost town! Look at these large offices of the so-called IT revolution; ``for rent; for sale; call; no terms too poor to be accepted!''

Around the country, of 50 of the states, at least 46 are saying that they are bankrupt. They are not bankrupt, because they're states, and have a political status which insures them from some of the things that can happen to a business enterprise, but they're, by all standards, essentially bankrupt. That is, the states can not balance their budgets. If they cut their expenditures, cut their programs, they will drop the income of the state; which will drop the tax-revenue base. If they try to raise taxes in a collapsing market, it will just make it worse.

There is no solution, in terms of austerity measures of the type that are being considered now, that will work. There's not a governor in the country who can balance his budget. Doesn't exist. He may think he can, but it won't work. So therefore, he has to make fundamental changes.

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