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To: NOW who wrote (54208)	1/4/2001 3:10:01 PM
From: NOW	Respond to of 436258

"While the government in Japan could tap the huge savings of its citizens, the US government has no domestic savings to tap. Therefore if private debt goes sour, the government will need to force US citizens to raise their savings, so it will be able to pay back the loans to foreigners. Or to declare a moratorium on these loans. Because the determination if private debt is "bad", is out of the hands of politicians, they will not be able to do anything to stop these debts from becoming public debts. The government will be forced to choose between forcing a rise in local savings (as happened in countries that needed IMF "emergency aid") or defaulting on its debts. A forced rise in domestic savings has only one implication for share prices: A crash. "