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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: DMaA who wrote (118304)	6/5/2005 1:35:10 PM
From: carranza2	Read Replies (1) \| Respond to of 794346

If you think that increased savings by itself will get us on the right track, you are wrong. It is a part of the package, and definitely a salutary thing, but it is not the entire solution so long as the federal government is spending and taking on IOUs like a drunken sailor. Higher savings will only put a dent in our current account deficit. So long as we import more than we export, and allow other countries to gather dollars and buy UST bonds while they do not allow their own currencies to rise to reflect their increased prosperity resulting from their trading success with us, we are creating the condition for disaster should they decide to dump UST bonds and US assets. Fallows is exactly right. It happened before in Asia and in Mexico in the last few years, and we are allowing the same conditions to be put in place as against the US. So long as the UST has to continue to sell securities to foreigners to finance our deficit, we are in trouble because there is a finite number of bonds that can be sold and foreigners' apetites for them are limited. What we are doing is giving others the right to eventually decide our prosperity.