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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: philv who wrote (20241)	2/19/2004 7:22:40 PM
From: sea_urchin	Respond to of 81913

Phil > Debt isn't just an American phenomenon. Europe is struggling as well. Both France and Germany (I believe Italy also) are exceeding their agreed upon EU limits. The European debt is nothing like that in the US, which is increasing year by year for over 20 years and has reached levels unheard of in history. Furthermore, the US debt is, I believe, at least 50% foreign owned making the US the world's largest debtor nation, ever. A small amount of debt is actually considered to be a good thing because it "stimulates" the economy. What happens is the government buys goods and services via the debt and then pays off the debt later through tax receipts or issuance of bonds etc. In the German situation, because of the strong Euro and a weak internal demand, the debt has been necessary to combat the resultant deflation, in other words an overproduction of goods and services with a resulting fall in prices, unemployment etc. In the US situation, the goods are not even being produced in America and the debt is being used to "stimulate" production in other parts of the world, eg China. This goes far beyond "ordinary" economics into the realm of globalism and world economic domination ie war by other means. The US argues that cheap foreign imports prevent local inflation although it is clear that they do not prevent unemployment, which is another story entirely. > everybody without exception is living beyond their means. Only the US really is. Everyone else intends to pay their debt in the foreseeable future or at least to control it within manageable limits, as you suggest. > We cannot just blame our governments, because nobody wants to make the sacrifices necessary to reign in let alone repay the debt Yes, there is a political aspect to it but, in a deflationary situation, like in Europe or Japan, if the government doesn't step in and drive the economy by purchasing goods and services businesses will collapse and recession/depression will ensue. This can then take years to cure, so governments do what they can to prevent it. Debt is thus a way of smoothing out the booms and busts which are inherent in "uncontrolled" capitalist economies. > There is apparently no fear that the debt will be called in whole or part, so the party continues, and our governments can contemplate whatever foolish expenditures they wish on our behalf. Yes, that's Keynes gone mad. Instead of using the debt "stimulation" only in times of reduced demand, they attempt to "grow" the economies artificially by creating demand even in "good" times. That causes inflation and the "bubbles" which have been evident in the US stock and property markets and where a crash is prevented by maintaining interest rates at historically low levels and devaluing the currency, although it is quite clear that the weak currency will not do much to bring jobs back. > did you know that even Saudi Arabia has a huge yearly budget deficit? Yes, I knew and I was surprised when I did learn about it. But, when I thought about it it made sense and the reason, I concluded, is largely political (a) The Saudi government is trying to "grow" the economy as fast as possible because it is not a democratically elected one and there is widespread unemployment and dissension amongst the populace (b) By being in debt to US banks ensures a friendly relationship to the US and lets the American "imperialists" know that they would not be better off if there was to be a US-inspired "revolution" and a change in regime from the Saudi royalty towards "democracy", as in Eyerak where, as you have seen, the first step towards "democracy" is the creation of enormous debt. Here's quite a good piece on money supply etc en.wikipedia.org