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Wednesday, October 21, 2015

The Saudi's run their budget deficit up to 20% of GDP to accomplish one goal. Meanwhile, U.S. and Europe impoverish millions over deficits of 3%.

As we sit here worrying about a measly deficit that is 3% of GDP, which is ridiculous and even below that of the pathetic Eurozone nations, meanwhile, kids go hungry, people are homeless, our roads and bridges crumbling, Saudi Arabia is running a deficit of 20% OF GDP in order to accomplish one policy goal: to crush North American shale oil producers. (And they are not cutting back on their domestic obligations.)

"Saudi Arabia, the main architect of OPEC’s new strategy, will have a budget deficit of 20 percent of gross domestic product this year, the International Monetary Fund estimates. While the kingdom has been able to tap foreign currency reserves and curb spending to cope with the slump, financial assets may run out within five years if the government maintains current policies and prices stay low, the IMF said Wednesday."

Who is truly pathetic here? It is America and Europe. Well, maybe not pathetic, but it's glaringly obvious that the true nature of policy in both is to strip every last bit of wealth and savings and give it to the plutocracy.

Disgusting.

By the way...if we were to run a deficit similar to the Saudi's that would equate to nearly $4 trillion!!! Think about that!
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4 comments:

  1. Ralph MusgraveOctober 21, 2015 at 7:15 AM

    First, national debts are made to disappear by the simple expedient of having central banks print money and buy up the debt (QE).

    Second, the hundreds of billions of Treasuries being sold by the Chinese are being lapped up by native US buyers of that debt.

    Third, the Saudis run a deficit which makes the US deficit look near non-existent.

    Rogoff and Reinhart’s whole world is being turned upside down. I assume they’re soiling their pants.

    ReplyDelete
  2. Matt FrankoOctober 21, 2015 at 7:30 AM

    "Treasuries being sold by the Chinese are being lapped up by native US buyers "

    Could be Europeans this year Ralph... US fiscal deficit about equaled the US trade deficit this past year Ralph... doesnt seem like the domestic US is saving currently as boomers retiring and drawing pre-tax savings out of ERISA accounts... net outflows out of many of the asset managers currently....

    ReplyDelete
  3. mike normanOctober 21, 2015 at 7:53 AM

    "Rogoff and Reinhart’s whole world is being turned upside down. I assume they’re soiling their pants."

    We can only hope, Ralph. We can only hope.

    ReplyDelete
  4. IgnacioOctober 21, 2015 at 8:13 AM

    There is a shortage of US and EU bonds... Maybe we can use Saudi now? Lol...

    Anyway, I'm pretty sure the typical answer will be 'but they can afford it, they are a petrostate'. Let the confussion continue.

    ReplyDelete