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[Gattigap]

Fiscal conservatives, listen up. The Money Gods are talking to you, and they are Not Pleased with Your Leader. Will you listen, or will you continue to bow down to the Sacred Cow?

• This raid-the-piggy-bank approach has allowed American consumers to play sugar daddy for the world economy. Spending down their savings, Americans have purchased the world's goods so avidly that they have pumped the current account deficit to a record 5.7 percent of GDP in this year's second quarter.
  
  "Never before has a president stood for reelection with the United States more dependent on foreign financing of domestic growth," notes [Morgan Stanley's Stephen] Roach. Looking at the countries, such as China and Japan, that finance this "increasingly tenuous disequilibrium," Roach wryly comments: "This is the real 'coalition of the willing.' "
  
  Wall Street knows the numbers don't add up. And investors must have noticed this week when the head of the International Monetary Fund, Rodrigo Rato, lectured America about its deficits as if it were a Third World country. Thus the sluggish stock market -- despite corporate profit rates that have bounced back to bubble-economy levels of the late 1990s. Indeed, according to Fed valuation models cited by Makin, U.S. stocks that were trading well above "fair value" before the bubble burst in early 2000 are now well below.
  
  Perhaps the reason for Wall Street's torpor is that investors have actually been following this wretched political campaign -- and noted the vapid debate about economics. Bush and Kerry are claiming they'll cut the budget deficit in half over the next four years, but neither is offering convincing details. "In fact," writes Roach, "there is good reason to worry that campaign promises of both parties could compound the problem rather than fix it." He notes that Bush's pledge to make his unfunded tax cuts permanent is "especially worrisome."

WaPo