"The joke circulating Wall Street during the 1988 presidential campaign was a call to vote for the candidate you liked the least because the winner would be the loser. It was said that within days after Reagan left the White House the deficit would explode sending the dollar and the financial markets tumbling. The newly elected President would take the blame and his party would be in the doghouse for decades to come; so vote for the candidate and party that you want to be in the doghouse."

Could it be that that Wall Street was right, only a little early in predicting financial calamity from a large deficit in 1988? If so will it bring ruin to the President and the Republican Party? Or will we see the Bush administration turn a financial debacle to its advantage as it did with 9-11 declaring a national emergency and pushing through a radical agenda that palls the Patriot Act?

The fact is that America is in a much more precarious financial position than it was during the Reagan years. The current account deficit is breaking records and in relation to the economy is in territory that has historically brought crisis, the budget deficit is ballooning and the dollar is slumping.

The stakes are high. The last time America was in bad financial straits was during the Great depression of the 1930's. The hardship of the depression served as a backdrop for major political changes around the globe; Fascism rose in Germany and Italy while America witnessed the New Deal. The Great Depression also served as the precursor to WWII.

The following analysis shows why America is in financial trouble, what President Bush might do in response and some ideas as to what progressives and faith based activists can do to prevent the Bush administration from further hijacking our country.

Part I--A capital account problem. America is about to go bust. Our financial woes do not come from a borrowing binge gone too far, but rather from "over-investment" by central bankers looking to prop up the dollar. We have confused this inflow as a sign of American might and superiority when it is not. We need to realize that "the market" is terrible at allocating resources, particularly at a time when we are beginning a national debate about privatizing Social Security.

Part II--Be Prepared: The president will respond to the crisis the way he did to 9-11; He will politize it, build upon our country's fears and use it to further his crusade. Unless we are vigilant the Bush administration will prevail.

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