Uniqueness

World Economy High now

Ashley Seager, Guardian's economics correspondent, “If you don’t remember the 1960s, this year may help
you”, www.lexisnexis.com, The London Guardian, January 1, 2007

The world economy looks set for another year of robust growth. There are plenty of reasons to be optimistic
that the impressive performance of the past few years, since the world emerged from the mess of the dotcom
bust, will continue uninterrupted this year and possibly for the rest of the decade. Having grown by an average
of more than 3% a year so far this decade, the noughties look set to be the world economy's best decade on
record, eclipsing even the golden years of the 1950s and 1960s. In those three years the world economy has
grown by almost 5% annually - the fastest for more than 30 years. World stock markets are booming as
investors show their confidence.

Link

A. Hybrids Are Imported from Japan

House Appropriations Subcommittee on Energy and Water Development, Overview Hearing: Gas
Prices and Vehicle Technology, February 14, 2008 , Testimony of Don Hillebrand, Ph.D., Director,
Center for Transportation Research, Argonne National Laboratory,
http://64.233.167.104/search?q=cache:4ZC_X4C0V0cJ:www.anl.gov/Media_Center/News/2008/08021
4-
Hillebrand_oral_testimony.pdf+most+hybrid+vehicles+in+the+US+are+imported+from+Japan&hl=
en&ct=clnk&cd=4&gl=us

Toyota produces more than 80% of the hybrids sold in the U.S., and this situation is not likely to change
soon. The first modern hybrid vehicles were developed through U.S. Government research programs in the
early 1990’s. There was no commercialization because of low fuel prices, lack of battery technology, and
immature power electronics development, all of which contributed to make the vehicles expensive and
inefficient. In the late 1990’s, Toyota produced the first successful hybrid using new nickel metal hydride
batteries (NiMH). Toyota currently manufactures its hybrid vehicle in Japan and exports those vehicles to
North America.

B. Increase trade deficit would seriously affect US economy

Frank Shostak, scholar, “Does the widening US trade deficit pose a threat to the economy?”, Ludwig von Mises
Institute, February 2, 2006

Most economists are extremely alarmed about the effect of the expanding deficit on the current account. In 2004 the
deficit stood at $668 billion, or 5.7% of the gross domestic product (GDP). For 2005 we have estimated that the
deficit was around $788 billion, or 6.3% of GDP. As a result of the ballooning deficit, the value of US net external
liabilities, expressed at historical cost, jumped to $5.1 trillion in 2005 from $4.3 trillion in 2004. As a percentage of
GDP, net external liabilities climbed to 41% in 2005 from 37% in the previous year and 4.9% in 1980. It is held
that this increase in foreign debt cannot go on forever. If the Americans do not begin reducing their trade
deficit, there will come a time when foreigners will become less willing to hold dollar denominated
assets. This in turn will weaken the US dollar. Consequently, once this happens the United States will be
forced to increase interest rates (maybe sharply) to continue to attract foreign investments. Higher interest
rates in turn will plunge the economy into recession. In short, given the size of the current account deficit it is held
that the US dollar has to plunge in a big way against most currencies, and it is not possible to avoid a painful
adjustment as a result of this. It would appear that the trade deficit is a major economic problem that must be
urgently addressed in order to avoid serious economic disaster.

C. U.S. KEY TO GLOBAL ECONOMY

Fund Strategy, UK Finance Magazine Targeting High-End Investment, February 6, 2006

The emphasis on consumption explains the volumes' "Flying on One Engine" title. In the
book the phrase is attributed to Kenneth Rogoff, the Harvard economist who wrote the
foreword. However, elsewhere it has been attributed to Larry Summers, a former US
Treasury secretary. Either way the assumption is that American consumption is the engine
that drives the global economy. Or as Kathleen Stephansen, the director of global
economics at Credit Suisse First Boston, puts it, changing the metaphor from planes to
trains: "The US economy's high propensity to consume and to import, combined with the
country's policy flexibility, has reaffirmed the United States as the locomotive to
global growth."

Impact

Global economy crash causes global nuclear war

Mead '92 (Walter, member of NPQ Board of Advisors, Mew Perspectives Quarterly,
Summer, p. 30)

Is so, this new failure- the failure to develop an international system to hedge against the
possibility of worldwide depression- will open their eyes to their folly. Hundreds of millions -
billions - of people around the world have pinned their hopes on the international market
economy. they and their leaders have embraced market principles - and drawn closer to the
West - because they believe that our system can work for them.

But what if it can't? What if the global economy stagnates - or even shrinks? In that case,
we will face a new period of international conflicts: South against North, rich against poor.
Russia, China, India - these countries with their billions of people and their nuclear weapons
will pose a much greater danger to world order than German and Japan did in the '30s.