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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: neolib who wrote (161220)	4/29/2005 6:38:35 AM
From: Hawkmoon	Read Replies (1) \| Respond to of 281500

By the by, the wealthy guy starts handing out IOU's as payment, and the villagers, although they like being employed, and like seeing the IOU's swell in their closet, start to wonder if the guy can actually pay. I understand your argument and many have made it. And it would seem logical. However, think about that wealthy guy being a banker AND MAYOR, and the workers all know his bank is the safest one around because their own banks are either corrupt, or so undercapitalized, that they'd be better putting their money in a mattress. So they loan their money to the banker so they can remain employed. And he pays them interest because he can take that money and use it for investments that exceed the rate of interest (or he can call have his tax agents raise the revenue on his local staff/villagers in order to pay that interest fee). The bottom line is that those workers who make much of their living selling to the Banker/Mayor are in a real quandary of their own. They have to feed OUR economic "beast" in order to avoid having their OWN drag them back to its depressionary lair for an economic blood-letting. That's why the Chinese and Japanese are some of the biggest purchasers of our T-Bills, despite the recent falling dollar. They know their fates are tied to our own. Hawk