Tax the wealthy. Problem solved.

George Bush and China

While I usually think Paul Street is WAY too confrontational in his rhetoric, this one seems pretty accurate.

http://blog.zmag.org/index.php/weblog/entry/bush_china_two_deficits_and_the_ongoing_decline_of_us_hegemony/

He makes the case that we're borrowing to finance the deficit -- thus no inflation -- while taking apart our industrial base in deference to China's cheaper labor market, and thus cheaper goods.

In the process, we are disassembling what has kept the U.S. economy strong.

The only distortion I found was that he stated we are selling $399 Billion in bonds yearly to "foreigners" to finance the debt -- which is true -- but all that money is not sold only to China. Thus China's influence may not be as great as he states. That does not affect our loss of power, other than we're not giving ALL of it to China.
Permalink AllanL5 
August 2nd, 2005
You think we're in a bad situation? The UK has 4.71 trillion in debt to foreign entities, but only a 1.7 trillion GDP. Their debt outstrips ours nearly 4 to 1.
Permalink MarkTAW 
August 2nd, 2005
Hmm. Wasn't Great Britain the last great world empire leader? Sounds like we Americans ARE going down that path.
Permalink AllanL5 
August 2nd, 2005
In related news, today's papers said that at the going rate, Estonia will have paid off its entire national debt by 2010.

Cool.
Permalink Flasher T 
August 2nd, 2005
MarkTAW,

Do you have a source for that? I was under the impression that the UK's governmental debt was about 40% of GDP and the US's was about 65% (and I'm not sure if this includes state government debt). I haven't been keeping too close an eye on this recently so I may be remembering incorrectly or perhaps you meant something other than governmental debt.
Permalink Voltaire's Dog 
August 2nd, 2005
What Mark said is confirmed by http://www.cia.gov/cia/publications/factbook/geos/uk.html ...

GDP: $1.782 trillion
Current account balance: $[-33.46] billion
Public debt: 39.6% of GDP
Debt - external: $4.71 trillion

There's some big difference, apparently, I don't know what, between "Public debt" and "Debt - external".

The overview includes: "... Services, particularly banking, insurance, and business services, account by far for the largest proportion of GDP ... The economy is one of the strongest in Europe ..."
Permalink Christopher Wells 
August 2nd, 2005
I believe public debt is the money the population collectively owes to banks, whereas national debt is the money the country owns to the IMF, other countries, bond holders etc.
Permalink Flasher T 
August 2nd, 2005
CNOOC has withdrawn Unocal bid.
Free trade America. NOT !!
Permalink Chan 
August 2nd, 2005
Having infrastructure bought by a foreign _government_ (not a free private enterprise) has nothing to do with free trade.
Permalink Dennis Forbes 
August 2nd, 2005
You could make the argument that the U.S. supports free trade only when we win.

On the other hand, I can't really argue with that position. I like it when we win. I don't like it when everybody else loses, I think that is self-defeating in the long run.

It's the hypocrisy of SAYING you support free trade, then DOING things that clearly show "only if you win", that make me upset. And there's the added danger of acting out of idealism, when a more realistic response is what is required.
Permalink AllanL5 
August 3rd, 2005

This topic was orginally posted to the off-topic forum of the
Joel on Software discussion board.

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