tag:blogger.com,1999:blog-2761684730989137546.post6961626278252502913..comments2024-03-28T07:50:06.102-04:00Comments on Mike Norman Economics: Some thoughtsmike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-2761684730989137546.post-31261548623044800402009-06-01T13:52:10.246-04:002009-06-01T13:52:10.246-04:00I would point out that this is a secondary reactio...I would point out that this is a secondary reaction to a weakening dollar. As the dollar weakens people will think we need to balance the budget.<br /><br />The perception is due to a misperception of the kinds of debt. People associated government debt with the real economy's debt - they think that we need to balance both when they are entirely different. <br /><br />The government can create and negate debt very easily.<br /><br />However, the real economy, mainly the public debt, is not so easy to get rid of.<br /><br />investment = spending<br /><br />If we demand the government to reduce spending, "printing", and crediting , then we shall not have the ability in the real economy to address the public's own debts.<br /><br />They are not the same, but there is linkage.<br /><br />This also brings up the point about China whose currency is pegged and fixed to be undervalued.<br /><br />Argentina artificially pegged it's currency to that of the U$D - 1 for 1. Argentina deregulated as per Menem / Bush / Reagan / Nixon in the 1990s and the result was catastrophe.<br /><br />The Republican't ideology is directly for blame for that bank failure in 2001.<br /><br />What does this have to do with China ?<br /><br />China has done the opposite - it is artificially undervalued to the U$D, and they created a global savings glut ( which we allowed ), and as such they are overwelmingly to blame for the current problem.<br /><br />Enron did this as a company to itself, Argentina did this as a country unto itself, and China has done this to the USA but in an inverted manner compared to the Enron or Argentina crisis.googleheimhttps://www.blogger.com/profile/14459089745473598235noreply@blogger.com