BUSH RUNS OUT OF FUNNY MONEY (so now it's time for us all to pay up)
7 months of gains and more than 400 points have been wiped off Wall Street shares in just three days.
Surprise surprise - when you go to war and push up the oil price, it affects the price of everything.
Everyone spends money on fuel. Every item in the shops is delivered by fuel. Every school is heated by, you guessed it, fuel.
While Bush's backers at Esso have been rolling in it as the price of their black gold rises, the rest of us, every single one of us, on both sides of the Atlantic, is paying for it.
Meanwhile the balance of payments crisis that is hitting America caused by borrowing money to pay for the war, means their money is worth less abroad.
So that means more dollars for every item imported.
And that means prices of imports going up in the shops.
So what happens next?
What can a government do when inflation starts to hit and its currency is worth fuck all?
Well, it needs to tighten the money supply so that people can't put up the price of things the way they usually do, and make it a more attractive place for foreigners abroad to put their money.
The way to do that?
Put up interest rates.
But if you put up interest rates, then not only does the price of a mortgage goes up, but the cost of credit card repayments go up, and every company that borrows money has to pay more to put it back.
And when they pay more to get it back, guess what happens?
They pass the cost of those repayments to the consumer, who's already paying higher prices, and have less money in their pocket to pay for them because their mortgage has gone up or their credit becomes more expensive.
And then the demand for products drop.
And then the people that make those products lose their jobs, as manufacturers, particularly those that make expensive luxury products that most people buy with a loan (like a car), cut employees as demand for their goods fall.
And that little scenario is why Wall Street today had its biggest one day fall in seven years.
To try and get himself out of this mess, President Bush is pushing through $70 billion of tax cuts.
But tax cuts aren't a one-way street.
Otherwise every government would do it the moment they hit trouble.
Tax cuts usually take money away from the poor, since the rich have more than enough money to live on and their cash stays in the bank.
But the thing about the poor is they spend every penny they have. They don't stop spending because their shares have dropped or their mortgage has gone up, because they don't have shares or a mortgage. And they don't have money to spare.
So tax cuts can only have a limited effect in this position.
The only silver lining is the American job market, which is still pretty good right now.
People in work don't have to claim benefit and do pay taxes (unless they have a good accountant).
But it will be a tough balancing act for Bush to deliver.
Unfortunately, the full effect of his spending on the war will probably only be really felt after him and his oil-making mates have fucked off out of office and are laughing all the way to the bank.
If it's still there.
While the expanision of the Chinese and other economies eases the reliance on American cash to pump the world's economic engine, the old adage that if America catches a cold, the world sneezes, is still true.
It could be a very dry summer.
In more ways than one.