The Economy: Australia 1, USA 0

In the USA:

1. Absurd levels of housing loans were extended for many years to people who could never afford them. These people cold be excused for hoping that the mortgages would be a better option than spending similar amounts on rent.
2. Rampant credit equals high debt levels, and feeds into high house prices as easy money and more buyers force prices up. The higher the house prices, the more credit and thus debt ensues. This vicious circle spiralled out of control.
   
3. No laws of oversight were set up, for instance to prevent lenders from promoting untenable loans in order to collect commissions.
   
4. Politicians supported this system for personal gain: both in monetary kickbacks from lenders and to retain office.
5. The system, the economy, collapsed when the straw of a petrol price surge broke the camels back.
   
6. A bill that many of the public and politicians themselves accepted as bad got passed. Many politicians had little comprehension of the economic issues, abdicated all leadership, panicked, and voted 'to do something'. The bill will firstly help the rich and the powerful. The ugly side of the 'American Dream' is evident for all to see. It seems second-nature for their rich and rampant capitalist leaders to make things work for themselves first. Yet again their poor will get the crumbs at the table.
7. American banks have no confidence in each other's robustness, so are currently unwilling to lend at any rate. Therefore rate cuts would be pointless.
8. The USA is headed for a depression. Whether their political system can serve them and what mayhem might result is entirely a matter of conjecture at this time. However if the highly partisan political views as expressed on the Fox newschannel, and those reported in their legislative assemblies is any indicator, then it seems highly unlikely that sufficient sensible and logical thinking will prevail that might lead them to make sane laws to lead them back to prosperity for a very long time.
   

In Australia:

1. Financial system regulation has been well maintained for decades, so there has been less excess in lending compared to the USA.
2. Political corruption seems to be much less rampant than in the USA.
3. Housing price increases have been somewhat more sedate, as mortgage rates and conditions have been set sensibly.
4. Our financial system, and banks, have remained sound. Recessionary pressure mostly results from an expected drop in value (price and volume) of exports to trade partners in Asia who are already in recession or expected to head that way, due to their exposure to the USA. Australian recessionary pressure is therefore somewhat indirectly attributable to the expected deep recession in the USA.
5. The Reserve Bank of Australia has acted decisively today to cut interest rates by 1%. This ought to help counter our possible slowdown. This is appropriate for Australian circumstances, but is not a suitable action for the USA to take.

• The scorecard so far: Australia 1, USA 0