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'Speaking to the Financial Times on Oct. 5, Dominique Strauss-Kahn, chief of the International Monetary Fund, or IMF, said economies should not use exchange rat

by devmonk 16y ago

'Speaking to the Financial Times on Oct. 5, Dominique Strauss-Kahn, chief of the International Monetary Fund, or IMF, said economies should not use exchange rates as a weapon.' Is it a weapon, or are they preparing for something to happen to the U.S. economy? The U.S. has just been "printing" money without it being backed by something tangible of worth, while spending like crazy without raising taxes. The U.S.'s National Debt is somewhere around $13,554,861,000 USD and growing ( http://www.usdebtclock.org/ http://www.usdebtclock.org/ http://zfacts.com/p/gross-national-debt.html http://zfacts.com/p/gross-national-debt.html ), and the answer we come up with is "printing" more money, spending more than we'll ever have, and borrowing even more. A major chunk of that debt is owed to China whose economy is primarily based on producing goods for purchase by U.S. consumers. China may at the moment be unable to afford to make the U.S. pay up, but all it takes is for something to happen to the U.S. economy such that the U.S. consumers slow purchasing even more, the Targets/Walmarts start closing, and China will drop us before we have a chance to ask for more money from them. It doesn't matter how this happened right now (politicians afraid to tax and afraid to cut spending across the board) as much as what we are going to do about it. Turkey's currency warfare is a small issue compared to this mess, but I think it could be a signal that they know something that we haven't yet.

guelo 16y ago
Your economics are just wrong. Inflation is non-existent, the markets are willing to lend to the U.S. government at all time low rates, the effects of the first stimulus are over, the economy is barely moving and is in danger of double-dipping. The correct prescription is a giant second stimulus and more quantitative easing by the Fed. The time to worry about debt was when the economy was growing (i.e. back when W was doubling the debt). Now we should worry about growth.
- devmonk 16y ago
  Inflation may be non-existant now, but you can't owe forever, otherwise the concept of debt and the money you owe is imaginary and useless. When those we owe are tired of us owing and not paying and they are able to live without us, where are we then? Growth implies that we are making money. We aren't. Our country is bankrupt so many times over, it would be hilarious if it weren't so freakin' pathetic. Go ahead an vote Democratic if you want to focus domestic growth and large gov't, and increase debt. Go ahead and vote Republican if you want to make cuts, but then reinvest those cuts back into other programs, and increase debt. Go ahead and vote Libertarian if you are allowed to or want to write them in; they won't get anything done because there aren't enough of them, and the only ones that make it into office are going to want to play politics like everyone else. Or find out who the deficit hawks that you find in our gov't and vote for them.
  - cschneid 16y ago
    As of July 28, 2010, the "Total Public Debt Outstanding" was approximately 93% of annual GDP. -- Wikipedia It'd suck, but we could pay that off in 20 years if we cut the budget to something maintainable. Not optimal, but nowhere near your "so broke hurf durf, never pay it off".
    - technomancy 16y ago
      > if we cut the budget to something maintainable ... which would be in the best interests of the country, but against the best interests of a given single politician, so it's very unlikely.
      - cschneid 16y ago
        I agree, it'd be a very hard political decision. But the hurf-durf about us being beyond-broke is overblown, at least currently. I do however agree that the trajectory we are on is going to screw us.
    - devmonk 16y ago
      U.S. debt held by public as % of GDP projected at 230% by 2035 and 1000% by 2080 at current rate by Peterson Foundation (a non-politically affiliated NPR sponsor): http://www.pgpf.org/~/media/PGPF/Media/PDF/2010/04/16/04162010_Fiscal_Outlook_G2_mmp.ashx http://www.pgpf.org/~/media/PGPF/Media/PDF/2010/04/16/041620... For more numbers: http://www.pgpf.org/Issues.aspx http://www.pgpf.org/Issues.aspx
- anamax 16y ago
  > Inflation is non-existent, the markets are willing to lend to the U.S. government at all time low rates, They're willing today because they don't have better alternatives. Those things will change. > The correct prescription is a giant second stimulus A second stimulus can't work unless it's done competently. What are the odds of that happening? (Recent example - salary increases to govt workers were counted as "jobs created or saved.") > Now we should worry about growth. Does spending $250k for a job count as growth? (Yes, the number matters, as does the duration of a job.) Are you really certain that the money that was borrowed by govt wouldn't have resulted in a job if it hadn't been borrowed? (Banks are sitting on money that the fed is shoveling to them, but what about others?)

by devmonk 16y ago

guelo 16y ago

Your economics are just wrong. Inflation is non-existent, the markets are willing to lend to the U.S. government at all time low rates, the effects of the first stimulus are over, the economy is barely moving and is in danger of double-dipping. The correct prescription is a giant second stimulus and more quantitative easing by the Fed. The time to worry about debt was when the economy was growing (i.e. back when W was doubling the debt). Now we should worry about growth.

devmonk 16y ago
Inflation may be non-existant now, but you can't owe forever, otherwise the concept of debt and the money you owe is imaginary and useless. When those we owe are tired of us owing and not paying and they are able to live without us, where are we then? Growth implies that we are making money. We aren't. Our country is bankrupt so many times over, it would be hilarious if it weren't so freakin' pathetic. Go ahead an vote Democratic if you want to focus domestic growth and large gov't, and increase debt. Go ahead and vote Republican if you want to make cuts, but then reinvest those cuts back into other programs, and increase debt. Go ahead and vote Libertarian if you are allowed to or want to write them in; they won't get anything done because there aren't enough of them, and the only ones that make it into office are going to want to play politics like everyone else. Or find out who the deficit hawks that you find in our gov't and vote for them.
- cschneid 16y ago
  As of July 28, 2010, the "Total Public Debt Outstanding" was approximately 93% of annual GDP. -- Wikipedia It'd suck, but we could pay that off in 20 years if we cut the budget to something maintainable. Not optimal, but nowhere near your "so broke hurf durf, never pay it off".
  - technomancy 16y ago
    > if we cut the budget to something maintainable ... which would be in the best interests of the country, but against the best interests of a given single politician, so it's very unlikely.
    - cschneid 16y ago
      I agree, it'd be a very hard political decision. But the hurf-durf about us being beyond-broke is overblown, at least currently. I do however agree that the trajectory we are on is going to screw us.
  - devmonk 16y ago
    U.S. debt held by public as % of GDP projected at 230% by 2035 and 1000% by 2080 at current rate by Peterson Foundation (a non-politically affiliated NPR sponsor): http://www.pgpf.org/~/media/PGPF/Media/PDF/2010/04/16/04162010_Fiscal_Outlook_G2_mmp.ashx http://www.pgpf.org/~/media/PGPF/Media/PDF/2010/04/16/041620... For more numbers: http://www.pgpf.org/Issues.aspx http://www.pgpf.org/Issues.aspx
anamax 16y ago
> Inflation is non-existent, the markets are willing to lend to the U.S. government at all time low rates, They're willing today because they don't have better alternatives. Those things will change. > The correct prescription is a giant second stimulus A second stimulus can't work unless it's done competently. What are the odds of that happening? (Recent example - salary increases to govt workers were counted as "jobs created or saved.") > Now we should worry about growth. Does spending $250k for a job count as growth? (Yes, the number matters, as does the duration of a job.) Are you really certain that the money that was borrowed by govt wouldn't have resulted in a job if it hadn't been borrowed? (Banks are sitting on money that the fed is shoveling to them, but what about others?)