Join 3,496 readers in helping fund MetaFilter (Hide)


The phrase ''Banana Republican'' comes to mind
January 8, 2004 11:20 AM   Subscribe

I.M.F. Report Says U.S. Deficits Threaten World Economy
With its rising budget deficit and ballooning trade imbalance, the United States is running up a foreign debt of such record-breaking proportions that it threatens the financial stability of the global economy, according to a report released Wednesday by the International Monetary Fund. Prepared by a team of I.M.F. economists, the report sounded a loud alarm about the shaky fiscal foundation of the United States, questioning the wisdom of the Bush administration's tax cuts and warning that large budget deficits pose "significant risks" not just for the United States but for the rest of the world. The report warns that the United States' net financial obligations to the rest of the world could be equal to 40 percent of its total economy within a few years--"an unprecedented level of external debt for a large industrial country," according to the fund, that could play havoc with the value of the dollar and international exchange rates.
From The Brookings Institute: Sustained Budget Deficits: Longer-Run U.S. Economic Performance and the Risk of Financial and Fiscal Disarray (Full Report PDF)
posted by y2karl (60 comments total)

 
Does anyone get the unsettling feeling that all these multinational organizations are slowly amassing evidence to use in justifying regime change in the US?
posted by VulcanMike at 11:43 AM on January 8, 2004


No, it appears more likely that this evidence will be used to justify large spending cuts in everything except "homeland security" and "defense" spending.
posted by dragline at 11:47 AM on January 8, 2004


FUCK the IMF anyway
posted by Tryptophan-5ht at 12:08 PM on January 8, 2004


Same old half-empty glass thinking again. The disaster will not happen. Paul Krugman and his cohorts will be discredited forever.
posted by 111 at 12:13 PM on January 8, 2004


Let me get this straight. As a percentage of GDP, current deficits are smaller than those of the 1980s, and will likely decrease. Yet the US deficit is perilously dangerous now? That wasn't even the case in the 1980's and 1990s.

As if the fiscal stewardship of the US is worse than that of the rest of the world? At worst, the current US spending situation is a stimulous package for the rest of the world.

Unbelievable.
posted by ParisParamus at 12:14 PM on January 8, 2004


PS - If an international liberating army marched on washington to remove our despotic leader [regime change USA!], Id be there with a party hat and noise makers. Id bring enough noise makers that I could pass them out too, so I wouldn't be the only one celebrating.

also, id hastily erect a make-shift statue of Bush that we could tear down in a dramatic moment.
posted by Tryptophan-5ht at 12:15 PM on January 8, 2004


That was an incredibly well reasoned and eloquent argument, Tryptophan.

~~~~

What can we afford to spend money on, and what can't we afford to spend money on? What happens if the US defaults on it's debts and declares bankruptcy -- would it bring around a worldwide depression like none that's ever been seen before?
posted by SpecialK at 12:16 PM on January 8, 2004


Rubin Gets Shrill
posted by muckster at 12:22 PM on January 8, 2004


What happens if the US defaults on its debts and declares bankruptcy -- would it bring around a worldwide depression like none that's ever been seen before?

Disclaimer: IANAE (I am not an economist, not by a long shot!)

Long before that happens, as I understand it, the US will eventually get to be such a bad credit risk that the world will simply stop buying our bonds to support our continued debt. Then the shit hits the fan.

Of course, since they buy our bonds to support our debt which in turn supports our purchase of foreign products, that's where it gets messy and loses me. As I said, IAMAE.
posted by tippiedog at 12:26 PM on January 8, 2004


Gee, the IMF is shrill, Krugman is shrill, Rubin is shrill, only the sycophants of aWol are calm reasonable voices.

Paul Krugman and his cohorts will be discredited forever.

Correct 111? You really should have blown a rasberry to go with that statement.
posted by nofundy at 12:28 PM on January 8, 2004


Paul Krugman and his cohorts will be discredited forever.

unlike, say, the omniscient David Stockman or the oh-so-right Arthur Laffer, one assumes

At worst, the current US spending situation is a stimulous package for the rest of the world.

how exactly?
do you know what is the actual meaning of "stimulus package"? doesn't seem likely
also, care to elaborate your "the Iraq War will pay for itself" economic forecast, since we're discussing Economics?
posted by matteo at 12:33 PM on January 8, 2004


Don't cry for we, Argentina...
posted by y2karl at 12:34 PM on January 8, 2004


OK, so here's one for the economists in the audience: where's the best place to have your $$ invested when the meltdown comes? You want to be able to survive hyper inflation, so fixed-interest assets are out. Do stock markets crash in these situations? How about foreign stocks? (but how do you get foreign stocks that aren't denominated in dollars?)

Krugman's been warning about a meltdown for months now, and yet I still haven't read anywhere what happens when the US has a meltdown like that. It's not like Argentina, where people can just abandon ship and move their money to America.
posted by alms at 12:49 PM on January 8, 2004


If you owe the bank $40,000 and you can't pay then you're in trouble. If you owe the bank $400 billion and you can't pay then the bank's in trouble.
posted by dodgygeezer at 12:50 PM on January 8, 2004


You know, for years people have been complaining about the supposedl bias of the NY Times, but this is the first article in which I've noticed blatant distortion and wordplay that get in the way of giving information.

the report sounded a loud alarm about the shaky fiscal foundation of the United States

That's just sloppy journalism, and it kinda annoyed me.


Here's the actual report, so that you can read the IMF's thoughts exactly.
posted by Darke at 12:51 PM on January 8, 2004


How about foreign stocks? (but how do you get foreign stocks that aren't denominated in dollars?

Quick rule of thumb: Buy them through a foreign stock exchange.
posted by Darke at 12:53 PM on January 8, 2004


But anpther warning from a Left wing smirk tank! We have told the world to buzz off on all other matters. We can do it here to. All we need to is stop giving foreign aid to the countries of the world. Bring our troops home and save zillions. And tell the UN their hq is up for sale so go to Brussels and find new digs.
posted by Postroad at 12:58 PM on January 8, 2004


This is the consolation if GWB gets reelected: he'll have to deal with his own mess. If a Democrat wins and tries to clean it up, then all those people don't do math will blame the Democrat for creating the problem.
posted by alms at 12:59 PM on January 8, 2004


If an international liberating army marched on washington to remove our despotic leader [regime change USA!], Id be there with a party hat and noise makers. Id bring enough noise makers that I could pass them out too, so I wouldn't be the only one celebrating.


i can't support this. being a huge bush hater, as well as a non-supporter of the iraq invasion, i'm pressed to reason that this kind of action is against international law, destroys our territorial integrity and defies our innate right (or what we the people believe to be the right) of self-governing. bush is bad, imho as bad as they get, but this home has to solve its own problems if any progress is to be done. i still believe in the great human experiment that is the united states, her problems, lessons and all. other nations will always strive to steer the USA, indeed all nations according to their own interests, but this government, meaning the broad 'this american government' ideologically supports itself by the guise of, if not the defacto action of self-government. there will always be bad people seeking bad things. there will always be greed, and we as americans will always be testing the good, bad and profound waters of democracy. it's part of our social contract. but i for one, a democrat to the end, would not be pleased by an invading force sent to take over our government, and i would resist it.
posted by eatdonuts at 1:03 PM on January 8, 2004


what eatdonuts said. y'all better keep voting in those elections! we can fend off the necessity of any liberating armies if our election system works as it should, and we steer the country as the electorate.
posted by VulcanMike at 1:09 PM on January 8, 2004


"Republicans used to believe in fiscal responsibility, limited international entanglements and limited government. We have come loose from our moorings.”-- Sen. Charles Hagel (R-Neb.), LA Times, 11/30/03
posted by troutfishing at 1:11 PM on January 8, 2004


current deficits are smaller than those of the 1980s, and will likely decrease.

Ah... exsqueeze me?:

The U.S. federal budget is on an unsustainable path. In the absence of significant policy changes, federal government deficits are expected to total around $5 trillion over the next decade. Such deficits will cause U.S. government debt, relative to GDP, to rise significantly. Thereafter, as the baby boomers increasingly reach retirement age and claim Social Security and Medicare benefits, government deficits and debt are likely to grow even more sharply. The scale of the nation's projected budgetary imbalances is now so large that the risk of severe adverse consequences must be taken very seriously, although it is impossible to predict when such consequences may occur.
posted by kgasmart at 1:11 PM on January 8, 2004


Long before that happens, as I understand it, the US will eventually get to be such a bad credit risk that the world will simply stop buying our bonds to support our continued debt. Then the shit hits the fan.

Nah. The Fed will just debase the currency and pay the creditors with inflated dollars. This will punish savers, chiefly, and have other negative long-run consequences. But since the debt is dollar-denominated, an Argentine/ Russian/Asian style crisis is extremely unlikely.

OK, so here's one for the economists in the audience: where's the best place to have your $$ invested when the meltdown comes? You want to be able to survive hyper inflation, so fixed-interest assets are out. Do stock markets crash in these situations? How about foreign stocks? (but how do you get foreign stocks that aren't denominated in dollars?)

Few foreign stocks are dollar-denominated, and whether you purchase ordinaries or ADRs, you will profit if the dollar falls. (short explanation here, strangely) And while inflation is bad for stocks, it's a heck of a lot worse for bonds. You probably want to own natural resources and natural resource stocks, foreign investments (debt and equity), gold, or Treasury Inflation Protected Securities (or I-bonds). Real estate, despite being a hard asset, is probably not a good investment during a dollar decline, due to suppressed demand and high borrowing costs.

do you know what is the actual meaning of "stimulus package"? doesn't seem likely

And I thought that the hard left was supposed to be Keynesian. What happened to you guys?


Fiat money always causes disaster. Austrian Economics. Mises. Hayek.
posted by trharlan at 1:16 PM on January 8, 2004


What happens if the US defaults on it's debts and declares bankruptcy -- would it bring around a worldwide depression like none that's ever been seen before?

The only thing about a default of the US federal government is that it won't happen. It is not just my opinion - it is as a matter of fact not possible.

The difference between the US government and other governments such as Argentina is that US has the privilege of having its debt denominated in its own currency. If the US government ever feel that it cannot pay back its debt obligations, it can just print more of its own money to pay for it. That's right - the result would be a huge devaluation of the US dollar, and the creditors would still be the ones who are hurt the most, but a blow-up similar to other national governments, who have most their debt denominated in a foreign currency (e.g. Argentina's debt in USD), is not possible here.

This is not to say that the huge current account deficit the US is carrying right now has no risk. The real risk here is that, in face of potential further devaluation of the USD, foreigners stop lending money to US. Then the US economy - the "buyer of last resort" - will cease to be able to prop up the rest of the world's economy. I guess they'll just have to pass the baton to China.
posted by VeGiTo at 1:24 PM on January 8, 2004


OK, so here's one for the economists in the audience: where's the best place to have your $$ invested when the meltdown comes? You want to be able to survive hyper inflation, so fixed-interest assets are out. Do stock markets crash in these situations? How about foreign stocks?

Short the USD, and use the proceeds to go long on a currency which you think would rise against the USD.

In laymen's term, borrow US dollars and trade it for some foreign currency... If you believe in the meltdown.

Personally, though, I think the current account deficit will correct itself as the GDP expands.
posted by VeGiTo at 1:44 PM on January 8, 2004


"how exactly? do you know what is the actual meaning of "stimulus package"? doesn't seem likely
also, care to elaborate your "the Iraq War will pay for itself" economic forecast, since we're discussing Economics?"

By, ultimately, providing demand and investing, be it in Iraq, or Canada. I'm not commenting on the ethics or morality of it all, but from a pure economic standpoint, US deficit spending--investing on credit--benefits the rest of the world.

And if it forces the EU to abandon it's stupid inflation-paranoia fiscal policy (because the Euro gets so expensive, and Europe can't export), so much the better.
posted by ParisParamus at 2:12 PM on January 8, 2004


Thereafter, as the baby boomers increasingly reach retirement age and claim Social Security and Medicare benefits, government deficits and debt are likely to grow even more sharply. The scale of the nation's projected budgetary imbalances is now so large that the risk of severe adverse consequences must be taken very seriously, although it is impossible to predict when such consequences may occur.


The plan is right before your eyes: just as the very rich are favoured in tax legislation now, in 10+ years, those who are relying on Medicare & SS benefits will find the treasury has been plundered. Isn't that much obvious?
posted by dash_slot- at 2:34 PM on January 8, 2004



This is the consolation if GWB gets reelected: he'll have to deal with his own mess.


no, alms, our young people will have to deal with it. they'll absorb bullets, disfiguring wounds, and even the annihilation of their very beings cleaning up this mess, and george fucking bush won't have to deal with it at all. i'd like to see the decisions made if shrub's drunken, spoiled brat daughters were in any danger of being eviscerated by a chunk of shrapnel. whole nudder thang, huh?
posted by quonsar at 3:19 PM on January 8, 2004


> Fiat money always causes disaster.

The Gold Standard is an Economic myth whose only benefit is it sounds good

"...a gold standard would have all the disadvantages of any system of rigidly fixed exchange rates--and even economists who are enthusiastic about a common European currency generally think that fixing the European currency to the dollar or yen would be going too far. Second, and crucially, gold is not a stable standard when measured in terms of other goods and services. On the contrary, it is a commodity whose price is constantly buffeted by shifts in supply and demand that have nothing to do with the needs of the world economy--by changes, for example, in dentistry."
posted by jacobsee at 3:30 PM on January 8, 2004


so let me get this straight....the same International Monetary Fund that is so often blamed for exacerbating the ills of Latin America and East/South-East Asia, is now being listened to b/c they're talking smack about the US deficit?
posted by h00dini at 3:36 PM on January 8, 2004


y2karl quoting the IMF? Approvingly? You got some strange bedfellows there, y2. Us more up-to-the-minute progressives will be found resisting this oppressive tool of the global capitalist machine. Honestly, y2, you think you know a good lefty when you see one and then whoops you lift up the covers and he's in bed with the IMF. Jeez.
posted by jfuller at 3:41 PM on January 8, 2004


jacobsee - the article makes a good point - a fixed monetary system doesn't HAVE TO BE gold, but it doesn't necessarily follow that we shouldn't have a fixed monetary system.

the author places the bulk of his argument on who agrees with him, and how silly the people are who do not, but never really makes a single compelling point devoid of social context untill "The United States abandoned its policy of stabilizing gold prices back in 1971. Since then the price of gold has increased roughly tenfold, while consumer prices have increased about 250 percent. If we had tried to keep the price of gold from rising, this would have required a massive decline in the prices of practically everything else--deflation on a scale not seen since the Depression." Which is silly because he is essentially saying, everything went haywire once we left the gold standard so lets not go back.

the Federal Reserve is not obliged to tie the dollar to anything. It can print as much or as little money as it deems appropriate. tell me this sounds like a good idea.

the gold standard and its virtues as enumerated by Alan Greenspan before he sold out.
posted by Tryptophan-5ht at 4:26 PM on January 8, 2004


Treasury Inflation Protected Securities (or I-bonds)

This obligation alone is sufficiently the ticking time bomb if the shit hits the fam and the US has to deal with runaway inflation, which is near-fetched under the current fiscal course..
posted by Fupped Duck at 4:34 PM on January 8, 2004


and he's in bed with the IMF


I'm under the impression that karl's in bed with Rubin -- it's not really the same

anyway, one should think twice when a certainly-not-liberal gang like the IMF attacks one from the left -- it means you and your buddies are dangerously close to the point of no return.

a not-in-bad-faith observer would argue just that -- that even rightwingers like the IMF boys are now very worried about Bush's economic policies

you know, it's a little like Norman Schwarzkopf attacking Bush from the left before Iraq Attaq -- food for thought, excepts for various dittoheads of course

but anyway, fuck karl for pointing that out, and let's all go back to sleep -- the economy is in spic-and-span shape, and America is leading the world to a future of peace and prosperity

Consumer bankruptcies have exceeded 1 million a year since 1996 and hit a record 1.54 million in 2002. The American Bankruptcy Institute expects another record year in 2003.
...
Before the holiday season even began, consumer debt hit a record $1.98 trillion in October, according to the Federal Reserve. That translates to nearly $19,000 per U.S. household in credit card and automobile debt.
...
As the debt mountain rises, the nation's savings rate has dropped to 2 percent of after-tax income in the first half of 2003, federal statistics show. Financial planners worry that means many people lack the means to deal with financial emergencies, much less their eventual retirement, and is forcing them to turn to high-interest credit cards.
...


posted by matteo at 4:59 PM on January 8, 2004


>the same International Monetary Fund that is so often blamed for exacerbating the ills of Latin America and East/South-East Asia, is now being listened to b/c they're talking smack about the US deficit?

No, because if we continue into debt we will act just like any other nation that owes the IMF/World Bank/Foreign Inverstors - cut services, privitaze everything, allow foreign companies to buy our floundering companies, limit our exports to approved products, etc.

Trust me, you don't want to live under that, then again this is the very same thing the GOP has been trying to do anyway.
posted by skallas at 5:29 PM on January 8, 2004


I don't get all this FUD about the US debt. We are not Argentina. It's been worse in the (recent) past. It can get better just as fast as it got worse. It really strikes of politics. The Rubin article is total fear mongering. The IMF report is not supported by everyone at the IMF just the individuals who wrote it.
posted by stbalbach at 5:31 PM on January 8, 2004


It can get better just as fast as it got worse.

Can it?
posted by Space Coyote at 5:41 PM on January 8, 2004


But anpther warning from a Left wing smirk tank!

Left wing?


so let me get this straight....the same International Monetary Fund that is so often blamed for exacerbating the ills of Latin America and East/South-East Asia, is now being listened to b/c they're talking smack about the US deficit?

Indeed. So what's a lefty to do if they agree?

I think the point is this: even some individuals and organizations that are not traditional enemies of conservative financial policy are sounding an alarm. I don't give the IMF much credence, but if they are concerned, that says something.

Now Darke's Comment is interesting...
posted by namespan at 5:43 PM on January 8, 2004


Let me insert a neutral argument, here. That is, the effect of "real" money vs. "imaginary" money.

To explain the latter term, it is money fabricated out of thin air, for example, margin based on a small amount of real money (as in the great depression); or using $1M in collateral to secure $10M in loans "creating" $9M dollars of imaginary money (as in the S&L crisis).

Economic bubbles of all types, including debt bubbles, do not exist with only real money. Imaginary money must be involved, far beyond the available real money.

In some cases, though, imaginary money problems can be reduced with the stroke of a pen, the decimalization of currency where 1000 now equals 1, for example, with the French Franc or the Mexican Peso. All else being equal, nobody suffers under such a solution.

When more than one nation is involved, however, imaginary money becomes a tool to force conservative economic policies.

For instance, right now China is holding the value of its currency at an artificially low level, which strongly boosts its trade deficit with the US in imaginary money, despite the US advising them to cut it out.

But if they keep it up, they eventually kill off the US as a market for their products--the US would just "owe" them too much to get more goods on "credit". And it would be the Chinese economy that would take the hit, not the US.

If they do the sensible thing (which they seem to be starting to do), of first stabilizing their banks, then allowing their currency to rise to market value, the US trade deficit drops steeply, Chinese exports slow down a bit, but the US remains a viable marketplace for Chinese goods.
Imaginary money is leveraged down.

In a way, it's like a bank loaning money to a destitute bum. Properly speaking, the bank shouldn't do that, unless the bum has some collateral to pay the bank back with. Market forces will eventually stop the bank from making too many such bad loans, however.

But enter the IMF, who tells the bum that he shouldn't take the bank's money, because that could hurt the bank.
posted by kablam at 6:25 PM on January 8, 2004


they'll absorb bullets, disfiguring wounds, and even the annihilation of their very beings cleaning up this mess, and george fucking bush won't have to deal with it at all.

*sobs* won't anyone think of the innocent moneyless maimed bastard fucking children!?
posted by poopy at 6:28 PM on January 8, 2004


Gee, and I was just this afternoon jokingly echoing the famous line from a Who song: "Hope I die before I get old."

I wish my eight-year-old son luck. I'm part of the last generation to have a near-lock on a better place in the middle class than the previous generation did; I fear for where he'll end up.
posted by alumshubby at 6:38 PM on January 8, 2004


Building upon kablam's point

This looks to me like serious economic payback for euro-intransigence for Bush's adventures
posted by Fupped Duck at 6:40 PM on January 8, 2004


Since the United States Government is by far the most influential member of the IMF, why not just think of this as a voice in the back of its head saying 'it's about time for a diet' - one head of the same body talking to another.
posted by syscom at 6:41 PM on January 8, 2004


So, who's more of an ass, Bush or the IMF?

Hasn't the IMF fucked over every economy they tried to 'help'? I mean, that's not a very good track record.
posted by delmoi at 7:24 PM on January 8, 2004


the thing i love about poopy is, he is.
posted by quonsar at 7:33 PM on January 8, 2004


It can get better just as fast as it got worse.

Reread y2karl's second link: [there are] asymmetries in the political difficulty of revenue increases and spending reductions relative to tax cuts and spending increases... It is much harder for the political system to reduce deficits than to expand them.

If you doubt that, take some time to remember that the analyses under discussion are based on current tax legislation, in which all the Bush tax cuts expire in the next few years. And then remember that Bush & Co have made it clear that they will fight tooth and nail to make the cuts permanent, they will add more tax cuts, and they will roast anyone who talks about rolling the tax cuts back.

As for our children: I'm not too worried. It seems pretty clear that the kitty will hit the fan long before then. Maybe it's a job for Soros and his currency trading friends to push it along a bit...
posted by alms at 7:46 PM on January 8, 2004


also, the current deficit is higher, as a portion of the GDP of then it ever has been.
posted by delmoi at 7:47 PM on January 8, 2004


If a massive federal debt is no problem at all, as some folks in this thread are trying to claim, why doesn't the US just give the neolibertarians a wet dream, stop taxing everyone, and just put it all on the ol' Platinum Amex?
posted by Jimbob at 7:53 PM on January 8, 2004


So, who's more of an ass, Bush or the IMF?

Hasn't the IMF fucked over every economy they tried to 'help'? I mean, that's not a very good track record.


Cut ol' george some slack, he's gotten off to a slower start, but he's undefeated so far.
posted by Space Coyote at 7:59 PM on January 8, 2004


No, because if we continue into debt we will act just like any other nation that owes the IMF/World Bank/Foreign Inverstors - cut services, privitaze everything, allow foreign companies to buy our floundering companies, limit our exports to approved products, etc.

Trust me, you don't want to live under that, then again this is the very same thing the GOP has been trying to do anyway.


I'm from Jamaica...one of the poster-countries for what happens when you apply IMF recommendations, and I know what it's like to live under that. The US is not going to listen to the IMF and its shoddy recommendations, and it can afford to ignore them. Therefore, I'm not worried. Poorer countries however, do not have that luxury.
posted by h00dini at 8:11 PM on January 8, 2004


h00dini - there is a very big distinction to be made, in the case of the IMF, between the diagnosis and the proscribed cure.
posted by troutfishing at 9:11 PM on January 8, 2004


Hasn't the IMF fucked over every economy they tried to 'help'?

Korea has pulled out of its 1997 nosedive, for the most part, but whether the IMF's imposed austerity plan helped or hindered is, I suppose, up for debate.
posted by stavrosthewonderchicken at 11:37 PM on January 8, 2004


Since the United States Government is by far the most influential member of the IMF...posted by syscom at 2:41 AM GMT on January 9

Hasn't the IMF fucked over every economy they tried to 'help'? I mean, that's not a very good track record...posted by delmoi at 3:24 AM GMT on January 9

Hmm...
posted by dash_slot- at 9:57 AM on January 9, 2004


Liberty Dollars possibly a inflation proof concept?
posted by blahblah at 10:20 AM on January 9, 2004


Liberty Dollars possibly an inflation proof concept?
posted by blahblah at 10:22 AM on January 9, 2004


How Bush is plundering Social Security to close the deficit.
posted by homunculus at 12:10 PM on January 9, 2004


This liberty dollars... They say it's backed by gold, but I can't seem to find where I can exchange them for gold?
posted by VeGiTo at 4:22 PM on January 9, 2004


The President was like a blind man in a roomful of deaf people.

Treasury Secretary Paul O'Neill.
posted by y2karl at 5:09 PM on January 9, 2004


Tryptophan-5ht wrote:

the author places the bulk of his argument on who agrees with him, and how silly the people are who do not, but never really makes a single compelling point devoid of social context untill "The United States abandoned its policy of stabilizing gold prices back in 1971. Since then the price of gold has increased roughly tenfold, while consumer prices have increased about 250 percent. If we had tried to keep the price of gold from rising, this would have required a massive decline in the prices of practically everything else--deflation on a scale not seen since the Depression." Which is silly because he is essentially saying, everything went haywire once we left the gold standard so lets not go back.

did you notice that this was by krugman a few years ago ;) here's the original

I wondered about this...if we hadn't stopped using gold to back U.S. currency, surely gold prices wouldn't be the same as they are today? hmmm, maybe i don't understand what i'm saying...seems very complicated to wrap my mind around...

the Federal Reserve is not obliged to tie the dollar to anything. It can print as much or as little money as it deems appropriate. tell me this sounds like a good idea.

1996 Krugman seems to believe it is a good idea...I guess the requirement is that you have a completely trustworthy government making the decisions. I wonder if he's starting to wonder if we should go back to the gold standard?

the gold standard and its virtues as enumerated by Alan Greenspan before he sold out.

good article, thanks. interesting how 1966 Greenspan rails against the federal reserve (which he now heads), and against deficit spending (which he calls a tool for welfare statists to confiscate wealth). And now some would say the administration is using deficit spending to destroy the welfare state.

his arguments for preserving a gold standard make sense though
posted by jacobsee at 7:16 PM on January 9, 2004


1000 new jobs added NATIONWIDE in December 2003!!! That is 20 PER STATE!!! How about that jobless recovery, anyhow?
posted by y2karl at 11:16 AM on January 10, 2004


« Older What busking could teach the music industry...  |  Eleventh hour stories: a proje... Newer »


This thread has been archived and is closed to new comments