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To: zonder who wrote (268145)	11/20/2003 11:08:48 AM
From: GraceZ	Read Replies (2) \| Respond to of 436258

Tax cuts aimed at the rich do not translate into higher consumption as much as tax cuts aimed at the poor. Of course, but increasing consumption is not a worthy goal. We had a economic slump caused by a severe fall in investment spending (and the jobs that go with that) as evidenced by the continually falling C&I. We did not have a garden variety recession lead by a fall off in consumer spending, consumer spending never fell. Furthermore you never have to boost consumption. Consumption in this country flows as a consequence of people feeling financially secure (they have jobs). If you take measures to boost consumption the end result is rising prices which falls heaviest on the very people you are trying to help and it's a net zero gain to the economy. If you boost business investment, you create jobs. You create more investment by allowing those who will use their last dollar to invest, rather than consume, to keep more of their money. This is a very simple concept which most don't get because they are completely blinded by the ongoing war on wealth. I highly doubt if any of those arguments were voiced by advocates of a communist regime in the US No, but these kinds of statements show how deeply embedded Socialist ideas are in this country and they show that people fully accept redistribution of wealth as a means to an end. Most don't even realize these are Socialist and Marxist ideas. These kinds of remarks also show that a lot of people believe it is the job of the government to make people's lives "better" and that they should use economic means to do it. "Give the money to those who need it." The problems occur in who it is that decides what it is that makes someone's life "better" and at whose expense. Or I could say, even in the loosest sense, that Socialism and Communism are two different things. Socialism and communism are philosophies. They seek some unidentified ideal that resides somewhere in the intellects of their authors. Communism isn't an economic system. It's a tyrannical social system that uses economics for its ends. In Marx's concept there is no economics when the state of pure communism is achieved. During the interim economics is a bothersome appurtenance that must be used to remove the concept of poverty or scarcity from the minds of people. Socialism also has nothing to do with economics. Socialism seeks to achieve the betterment of man by authoritarian command. If there was a way to achieve this without economics, then economics wouldn't be involved. And which country is worthy to the throne, would you say, as the second most fervent practitioner of near-perfect Capitalism? This country hasn't arisen yet but the country which is importing wealth at an extremely high rate is China. If they follow history, this will result in a large financial dislocation at some point in their future. This likelihood takes them off the list for a while. Come on, Grace. You know it and I know it that ANY country's t-bills denominated in their own currency are zero-risk. Own any Russian government bonds back in 1999? A friend of mine traveled to Russian during that time and he said that he had to use a "hard" currency in the restaurants and bars (dollars, yen or marks) that they wouldn't take their own currency in ordinary transactions. I don't know what you mean by "traders' actions", for you must have noticed it is the Fed talking down the USD rather than traders speculating on it. And when it was rising was it the Fed talking it up? A currency's movement is always a product of a zillion actions every day in the market and the Fed action (as well as their statements) are just one of the factors those traders take into advisement. They may put more weight on what the Fed says or does, but the trade deficit might actually have more to do with the dollar being re-factored. Freedman says when a currency sells off it is simply moving from weak hands to strong ones. What is a painful hold to you isn't to me. What is a painful hold to the EU isn't to the Asian countries. That it worked so far is no guarantee that it will work in the future. This is true of everything so it's hardly worth stating. Abandoning the strong dollar policy was probably a good decision for the Current Account deficit The Forex market in dollars is so large that no one government or even a group of governments can influence it's movements (the G7 has tried and failed numerous times). A "strong dollar policy" has no teeth and never has therefore how can abandoning it have a consequence? You still labor under the misconception that prices can be fixed, they can't. The free market will always assert itself somehow. (although the recent rise in imports boggles the mind slightly) Only because you don't see the current strength in the economy or you don't fully understand that a falling dollar has had a deflationary effect on our trading partners. but it didn't do much for the continuation of the trust in the USD as the reserve currency Those who hold most of our reserves have increased their reserves of dollars at the same time the dollar went from 120 to 90.