Posted on 03/21/2006 10:08:04 AM PST by Marxbites
OOPS!
See the article in full WITH charts!
http://www.mises.org/story/1955
My bet is that it's the other way around. It's not that the word 'deficit' makes people scared, it's that scared people prefer to justify their helplessness by saying 'deficit' and other scary words.
There are people who want others to support them and they know they can't just say "raise your taxes and feed me". That's why they take America's 'capital surplus', call it 'trade deficit', and scream 'anyone who doesn't feed me is a traitor!'.
This thread will skyrocket to ten or so comments. Too many big words.
LOL!
Running a capital account deficit isn't a problem in itself. The problem is that as more countries use dollars in their central bank reserves, general trust in the value of the dollar has to go down given its increased supply. At that point, the dollar becomes vulnerable to speculation on the foreign exchange markets, leading to possible devaluation. Irrational psychology can have just as big an effect in this situation as well-considered economic logic.
This isn't cluelessness; this is what happened to the United States in January-March 1968, and is one of the reasons LBJ decided to stop escalation in Vietnam as well as Great Society social spending.
The root of most economic idiocy is Goldbugism.
And Goldbugism is a complex, and quite old, psychological disease. It's based on a sort of child-like obsession with the idea of gold being "real" and a distruct of things perceived as "not real" and also harkens back to the very old American political trope of suspicion of "Eastern Bankers."
The biggest saving grace of any debt or deficit the United States runs, is that these are in dollars, our own currency. That's much better, than, say, the typical third world country where the country's debt is also in dollars, but the local money is pesos, bolivars, suns, moons, stars, or sea shells.
Gold has value in and of itself - are you saying paper money has the same ?
Good thread bump
>Too many big words.
Smaller words:
The trade deficit is not bad. It is just a result of the US economy being attractive to foreign investors.
E.g., as translated, "We faux free traders are people who want others to support us, and we know we can't just say "destroy your self-preparedness, and entwine and massively encumber our government's (State & Federal) with debt owed to foreign enemy nations, and debase the currency, savings and meanwhile insure and subsidize me while I do all this outsourcing."
And that's how they take a massive trade deficit, call it a "capital surplus" LOL!!!!!!!! and scream "anyone who doesn't salute our Free Trade flag and continue to subsidize us is a traitor to the ideals of...Alexander Hamilton! No, that's not right. A traitor to the ideals and economics of George Washington. No, that's not right. A traitor to the ideals and economics of Theodore Roosevelt. No, guess that's not right. A traitor to the ideals and economics of Franklin Delano Roosevelt and Bill Xlinton. There. That's right. Thaaaaat's the ticket. Anybody who opposes those ideals can't be conservative....
Simpler (more accurate) words still: "It is just a result of the PRODUCTS of the U.S. economy (manufactures of goods and services) NOT being attractive (i.e., "competitive") to foreign BUYERs. Investors included."
The only thing that is "competitive" is the willingness of the special-interest Government cabal issuing debt in our name...backed up by our onerous taxes...at rates that still attract buyers at all. You are spending worse than a drunken sailor. At least a drunk sailor is spending his own money.
That sentence could be marketed under the label "TRUTH CONCENTRATE" because it packs several hours of thought into one line.
This is key to our disagreement. First, forget about all you know that I know, because it's not what you don't know that won't hurt you, it's what you do know that ain't that will --you know? Second, the reason I say that we got welfare bums complaining about our excess capital, is because
| ---they've arbitrarily decided that a capital surplus is bad for America, |
| ---they say the best way to eliminate the excess capital is by raising taxes, |
| ---these tax hikes are supposed to benefit people who don't want to do anything that free people want to pay them to do. |
Now, tell us how far you were able to follow and I'll go into more detail.
Ping for later.
Actually nothing has value in and of itself.
Even Gold (and silver) value as money can be traced back to both their scarcity and there use as a commodity (Mises regression theorem).
Beautiful! LMAO.
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