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To: JasonC
Um, might the $700 billion annual trade deficits running on and on, have something to do with it?

Americans buying lots and lots of foreign goods makes Americans think free trade is bad?

540 posted on 10/05/2007 7:58:22 PM PDT by Toddsterpatriot (Ignorance of the laws of economics is no excuse.)
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To: Toddsterpatriot
Americans buying lots of foreign goods is not the cause of trade deficits. Trade deficits are a result of US savings not matching US investment. They are a side effect of relying exclusively on easy fiat money creation to get out of every macroeconomic difficulty. They are also caused by foreign central banks deliberately stockpiling dollar debt rather than allowing their own citizens to purchase US goods with their foreign exchange earnings.

This has in just this president's term resulted in a net transfer of ownership of US capital assets to foreigners, of approximately $4 trillion. It has also resulted in a fall in the purchasing power of the dollar of 1/3rd against other major fiat monies, and of more like 1/2 against major commodities (gold, oil e.g.). Both have transfered enourmous amounts of raw political power to implacable enemies and materially reduced US weight and influence in the world.

There is simply no excuse for it whatever. We have financed a war exclusively by borrowing and then had the Fed print money to keep the cost managable in the short term. We have falsified capital allocation internally as a result, and at least $2 trillion in capital we do not have was pushed into low to zero yield excess real estate, largely just goosing prices, and now resulting in bad debts running into the trillions.

When we ought to have controlled domestic spending as rigorously as possible to fund war efforts, we instead massively expanded federal entitlements, and are now in the process of extending those to huge new classes of non citizens. Objective public accountants declare that the net worth of the US government is approximately negative $60 trillion through unfunded retirement and health care promises, but nobody is reforming any of it, instead they are extending it recklessly.

We are living far beyond our means and our enemies know it. Our future power is palpably ebbing as a direct result. And you treat the whole thing as another occasion for ideological bromide and utter passivity. That is why men who think as you do will not long be allowed to run the country.

570 posted on 10/06/2007 2:11:13 PM PDT by JasonC
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