America has given away it's greatest power

Point well made, Red.

Inflation happens, and while the Fed has been guilty of making it go up some at times, it usually helps keep it down.

The rest of your points are spot on as well. Anyone that reads that rant & thinks it makes sense probably doesn't know anything about how the system works.

 

The only thing that I agree is his concern for the national debt, which is not a popular topic among presidential candidates but whoever becomes the next president has to show some sense of fiscal responsability which Bush has failed to do during his two terms in office...Anybody that promises tax cuts needs to show his/her plan to cut spending from someplace else.

 

Some validity, sometimes misses very important points. Totally attempts to debunk every point in the original post, and fails to find nuggets of truth and support them.

The original post generally holds the fed has been bad, and Red debunks it all, giving the impression he thinks the fed has been good. Truth is usually in the middle, some good, some bad.

Does the fed have anything to do with the deficits? Yes. They don't draw up the budgets, but they have a bully pulpit, and they are supposed to be 'independent'. They have not educated the public to the evils of the deficits, and have supported the administrations in devaluing the currency. The point about a dollar being worth 4 cents today is true, and its sad. This occurred in the last 100 years, which is how long the fed has existed. It was not provided for in our govt. originally.

Does this affect you? I think it does. Life expectancies are longer. Suppose you retire at 65 and live another 50 years? Are you prepared to deal with the consequences of success (a long life)? Can you survive if your retirement income buys only half what it did when you retired, 50 years later?

Who does the devalued dollar benefit? Mainly the defense contractors. Our budget for defense is about $500 billion per year. The next highest nation is about $90 billion a year. Are the risks out there so great we could not deal with them at $300 billion a year? If that happened, a lot of those defense company CEOs couldn't earn their $20 million a year salary, bonus, stock grants, and stock option plans. Deficit spending is a good way to continue the govt. payola to their corporate pets, who benefit hugely in specific niches while the whole country slowly slips down the standard of living ladder. That's the trade off. That's what the skull and bones boys believe in.

 

The end is near

 

A nugget. This statement is not true. The fed is not the primary driver of deficits, but it can and DOES play a role. The whole system is inter linked. In 1981, when Paul Volker decided that inflation perpetrated a long term pain on all americans and he decided to kill it, he raised interest rates to 21%. He killed inflation, and induced a severe recession. Now, that recession, induced by the fed, depressed tax receipts and raised the budget deficit. Not directly, but indirectly, the fed can and does affect the deficit, totally independent of the congress or the president, from an operational perspective.

This is true. If our debt goes up too much in the long term, as is happening now, the dollar goes down in value, as is happening now. A Euro buys much more in america today than it did seven years ago, about twice as much in fact.
For example:

http://www.iht.com/articles/2008/01/20/business/foreign.php

 

This is dead on. China could cause additional weakness to the dollar, but it would be at the stake of their own economic interests.

They really don't own very much of our debt anyway. They are sitting around 400 billion which is chump change on our debt of 9 trillion, and even more insignificant when compared to our GDP.

 

I didn't say it was good or bad, I just said it was true, that the deficits weaken the dollar, and the cheap dollar encourages foreigners to buy up assets in the US.

Is it good or bad? Depends on which end of the mule you're looking at. :hihi:

It's good to be the king. All things considered, I believe that's a true statement. If the alternative to foreign ownership is bankruptcy, and you are an employee whose job is saved by the capital infusion, clearly that's a good thing for you. If you are the owner of the business, and you can't make a go of it because you're not smart enough, or you're under capitalized, or the foreign competitor just has so much money they want to buy you out to eliminate someone who competes on price, it could be a bad thing. If we're the USA, and decisions are no longer controlled by people with the US's interest at heart, even if only in 5th or 10 place, it could be bad. If it's a bank, who might get approved for a loan, and who gets denied?

You just lose control, and you may not like what you get. Somebody thought there was an issue with Dubai running our ports.

You assume the profits will be reinvested in the US, and that's not necessarily so. The salary dollars will turn over in the US economy, the profits may or may not. How many dollars have been repatriated to the US, by US companies that earned the profit overseas? Plenty, after a change in the tax law to reduce the tax bite temporarily, over the last couple of years. My company did it two years ago.

I would say China is ripe for a change, but I doubt it takes place as a revolution. They let the camel's nose under the tent with capitalism, and people will get rich and want a meritocracy running the country rather than bureaucrats. That transition could take place as in the old Soviet Union, rather than by revolution.

Saudi is a very interesting case, but the royal family is quite bright, IMO. If they treated their people as bad as the Shah did in Iran, revolution. But, they don't. Everyone gets a free college education, free health care, and cheap gasoline. And you get a good job. Do you care if the crown prince is stealing a billion here and there, if you have it plenty good? Are you willing to risk your life over it? Naw. If the royal family doesn't do something stupid, I don't see the conditions for overthrow. I think Bin Laden would love to overthrow the royal family to get control of the oil money, and the only risk I can envision is religious fundamentalism, which I also see as a risk in our nation (a risk that was realized in 2000 and the neocons exploited, resulting in the monumental idiot inhabiting the white house now).

 

How can you say that about a guy that has a 31% approval rating, much much worse than the approval rating of a certain someone that was being impeached.:rolleye33::lol: