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Originally Posted by Neal Stevens
Hey, come on now, this started out as a good debate  |
My apologies. That was kind of snippy of me.
And in order to make up for it, here's my contribution. Sorry it's disjointed, but I'm sicker than sick right now. I blame medicine head.
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That si such a beoluef that you just take as fact.
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No, Sky, government spending is indeed expensive. It has a very small multiplier effect, meaning that for every $1 in government spending, the corresponding increase in GDP dollars is very small. I'm sure James and I would disagree on the appropriateness of undertaking that spending in the first place (my stance would be that if there were no other spending happening, which was the case in the depths of the crisis, you have to use the last weapon you have even if it's not a very good one), what's not up for debate is that it is indeed a very expensive form of spending.
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China already has started to reduce the importance you have for its economy.
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Who is going to supplant us as the main consumer of Chinese goods? The Chinese themselves? China's economy is based around exports. Like it or not, if we all of a sudden shut down, they would be up a creek.
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Average income for city dwellers in 2009 was 18,858 yuan ($2,700), while in the populous countryside it was just 5,153 yuan ($752).
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In the U.S. the average income is around $50,000. Who's going to be a more valuable consumer? Who has more disposable income? The country full of engineers, programmers and accountants or the country full of farmers and assembly line workers?
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and bonds that meanwhile have become so risky to accept that even the first Americfan rating agencies have started to warn that they will withdrew their triple-A ratings for America.
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The same Ratings Agencies that completely missed (and helped cause) the biggest credit risk and collapse in a century. Why should anything they ever say be trusted by investors again?
I'll leave you with this - you seem to think that the rest of the world is funding our debt. In reality, we are much less dependent upon the kindness of strangers than the media would have you believe. We ourselves own 2/3rds of our own debt:
