your scenario is internally logic-flawed
because the value of money, internally and externally, is driven by the same set of policies and has the same value, more rather than less, whether or not the border is sealed
zimbabwe used to be the wealthiest nation in s.africa, full of ag biz, mining resource, and enterprise, and then embarked on fiat money inflation, resulting in today
the usa is just a fractally scaled up version of what could be zimbabwe, mark ii, before evolving to argentina, mark iii
the fiat money inflation game played through out history since before the publishing of the old testament, and i am not aware of a single end game that did not end in sorrow
but, let us watch n brief, and learn
in the mean time, just in in-tray
Player#1
Obama, intends to raise $210 billion over a decade by revising a tax policy that lets companies defer income earned abroad, and by closing a loophole that administration officials say lets firms hide foreign subsidiaries.
David Roche, global strategist at Independent Strategy, thinks the reason why Obama is pursuing this so aggressively is very simple - money.
"First of all, the Obama administration is going to see government debt-to-GDP in the U.S. go to 80 percent. He's running almost unfinanciable budget deficits close to 12 percent this year, probably 8 percent in the long term. Its (U.S. government) going to go after anything that is money in order to try to limit the damage its doing through its fiscal policies, and that includes the rich and corporations," Roche said.
Roche is in agreement with Ross that this is a bad move.
"If you undertake measures, whether they are fiscal or the way you direct bank lending or whatever, which stops the global flow of capital, it prevents investments being made in the most productive place to have those investments. This of course runs counter with globalization. It is in fact deglobalization. And this is a bad measure," Roche added.
Player #2
yes, it's a bad idea...the way i see it Obama has no clue about economics, but thinks he does, or that his team does. they're a bunch of interventionist bureaucrats , convinced they can plan the economy somehow. for instance i read somewhere that they apparently believe that this new tax measure will not only help fill their empty coffers, but also somehow contribute to an economic upswing by incentivizing corporations to relocate some of their overseas assets/production to the US. i don't think so...i rather believe that you have it right, this will accelerate the trend of multinationals removing themselves to new domiciles (which should eventually provoke additional taxation measures).
that's one of the big problems with spending one's head off in an attempt to avert economic contractions - it absolutely ensures that some mixture of higher taxation and inflation will happen in its wake, and that is an additonal obstacle in the way of recovery. who wants to invest knowing that both taxes and inflation will surely rise?
Player #3
Not only are they: a bunch of interventionist bureaucrats , convinced they can plan the economy somehow.
but they are - aside from Bernanke, who is an academic but common sense deprived and really dumb - a bunch of very dishonest people! Obama acting almost like Hitler, Mussolini or a Mafia boss.
Player #2
it would be too much to expect honesty from politicians. it is so to speak impolitic for them to be honest; their entire career requires constant stretching of the truth, as well as a good measure of ruthlessness (there are exceptions, but they are so rare that they should be preserved posthumoulsy in a gherkin jar for posterity).
not to forget, they are now charged, as members of the establishment that profits the most from the policy of inflation (i.e. the normal modus operandi of the fiat money system) to rescue what is at its core a dishonest system. inflation is simply put, theft (it steals savings from savers), so those who are charged with saving this system can not possibly be honest to begin with, because that would require them to admit that a system that allows systematic theft is not worth saving.
even so, in the let's say establishment-given confines of realpolitik there are of course differences in degree of dishonesty. the new team shows great promise regarding the efficient and thorough looting of tax payers, the destruction of savers and general dictatorial tendencies (the recent spat over Chrysler's bond holders serves as an example, and so does the fact, not commented much upon i have noticed, that team Obama has not rescinded in any way the doctrine of an almighty executive unrestrained by law that was introduced under Bush the lesser in his war on turr). |
