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Thread: Exclusive: Jobs 'Saved or Created' in Congressional Districts That Don't Exist

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    Re: Exclusive: Jobs 'Saved or Created' in Congressional Districts That Don't Exist

    Quote Originally Posted by scottsoperson View Post
    the government grew larger than the economy by the end of ww2. or the debt did.
    So what is your point?

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    Re: Exclusive: Jobs 'Saved or Created' in Congressional Districts That Don't Exist

    Quote Originally Posted by phattonez View Post
    Could you expand on this?
    Sure!

    Assuming a neutral currant account (exports = imports), the only way for the government to run a deficit is via foreign investment and internal investment. However this is not important, just the frame work.

    Regardless of the state payments, Current account (CA) + Capital financial account (KFA) = zero; CA + KFA = 0.

    The current account is the amount of money flowing into the economy (net exports, net income from abroad, and net unilateral transfers such as payments made abroad; and the capital account is the net flow of "unilateral transfers of assets into the country" such as when a foreigner buys a piece of property or Treasury Bills.

    In our situation, we have a negative current account which is exactly (in regards to absolute value) equal to that of the positive capital account. Because we purchase more (with dollars) from abroad than we export, many of our trading partners are left holding dollars. What do they do with these dollars? They purchase dollar denominated assets such as stocks, t-bills, property etc...

    Which is why we are able to run unimaginable deficits.

    Note: this is a watered down version
    Last edited by Kushinator; 12-02-09 at 06:58 PM.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: Exclusive: Jobs 'Saved or Created' in Congressional Districts That Don't Exist

    Quote Originally Posted by Goldenboy219 View Post
    Sure!

    Assuming a neutral currant account (exports = imports), the only way for the government to run a deficit is via foreign investment and internal investment. However this is not important, just the frame work.

    Regardless of the state payments, Current account (CA) + Capital financial account (KFA) = zero; CA + KFA = 0.

    The current account is the amount of money flowing into the economy (net exports, net income from abroad, and net unilateral transfers such as payments made abroad; and the capital account is the net flow of "unilateral transfers of assets into the country" such as when a foreigner buys a piece of property or Treasury Bills.

    In our situation, we have a negative current account which is exactly (in regards to absolute value) to that of the positive capital account. Because we purchase more (with dollars) from abroad than we export, many of our trading partners are left holding dollars. What do they do with these dollars? They purchase dollar denominated assets such as stocks, t-bills, property etc...

    Which is why we are able to run unimaginable deficits.

    Note: this is a watered down version
    Whew and i thought my logbook was weird.
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    Re: Exclusive: Jobs 'Saved or Created' in Congressional Districts That Don't Exist

    Quote Originally Posted by Goldenboy219 View Post
    Sure!

    Assuming a neutral currant account (exports = imports), the only way for the government to run a deficit is via foreign investment and internal investment. However this is not important, just the frame work.

    Regardless of the state payments, Current account (CA) + Capital financial account (KFA) = zero; CA + KFA = 0.

    The current account is the amount of money flowing into the economy (net exports, net income from abroad, and net unilateral transfers such as payments made abroad; and the capital account is the net flow of "unilateral transfers of assets into the country" such as when a foreigner buys a piece of property or Treasury Bills.

    In our situation, we have a negative current account which is exactly (in regards to absolute value) equal to that of the positive capital account. Because we purchase more (with dollars) from abroad than we export, many of our trading partners are left holding dollars. What do they do with these dollars? They purchase dollar denominated assets such as stocks, t-bills, property etc...

    Which is why we are able to run unimaginable deficits.

    Note: this is a watered down version
    Somewhere along the line my brain didn't want to make a connection. You mean a trade deficit allows us to hold more debt? Debt makes debt?

    Who shall ascend the hill of the Lord? And who shall stand in his holy place? He who has clean hands and a pure heart, who does not lift up his soul to what is false, and does not swear deceitfully. Psalm 24
    "True law is right reason in agreement with nature . . . Whoever is disobedient is fleeing from himself and denying his human nature [and] will suffer the worst penalties . . ." - Cicero

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    Re: Exclusive: Jobs 'Saved or Created' in Congressional Districts That Don't Exist

    Quote Originally Posted by phattonez View Post
    Somewhere along the line my brain didn't want to make a connection. You mean a trade deficit allows us to hold more debt? Debt makes debt?
    A trade deficit allows foreigners to purchase dollar denominated assets with the dollars they receive (because we are purchasing more than we are selling). The safest place to put money is in government guaranteed assets, such as US Treasury Certificates.

    So yes, in essence the trade deficit allows for the government to borrow from foreigners in an efficient fashion.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: Exclusive: Jobs 'Saved or Created' in Congressional Districts That Don't Exist

    Quote Originally Posted by Goldenboy219 View Post
    A trade deficit allows foreigners to purchase dollar denominated assets with the dollars they receive (because we are purchasing more than we are selling). The safest place to put money is in government guaranteed assets, such as US Treasury Certificates.

    So yes, in essence the trade deficit allows for the government to borrow from foreigners in an efficient fashion.
    So if I give my neighbor a rake and my own Tony notes and he gives me a car, he thinks that it's a good idea to buy some stake in my accounts? What is my neighbors rationale here?

    Who shall ascend the hill of the Lord? And who shall stand in his holy place? He who has clean hands and a pure heart, who does not lift up his soul to what is false, and does not swear deceitfully. Psalm 24
    "True law is right reason in agreement with nature . . . Whoever is disobedient is fleeing from himself and denying his human nature [and] will suffer the worst penalties . . ." - Cicero

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    Re: Exclusive: Jobs 'Saved or Created' in Congressional Districts That Don't Exist

    Quote Originally Posted by apdst View Post
    How many non-existant jobs were saved?...LOL!!!!
    Did anyone honestly expect this to be anything other than the spending circus so many warned against in the first place?
    Thank you

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    Re: Exclusive: Jobs 'Saved or Created' in Congressional Districts That Don't Exist

    Quote Originally Posted by phattonez View Post
    So if I give my neighbor a rake and my own Tony notes and he gives me a car, he thinks that it's a good idea to buy some stake in my accounts? What is my neighbors rationale here?
    This is a governmental thing, which should not be confused with how private industry operates.

    If China trades (on value) with the US, and we demand more than we are going to export, we are going to pay them using dollars. Reason be, even if China did float their currency, we would have to devalue our dollars by purchasing renminbi. This is quite inefficient, so instead, we purchase using dollars. In the same token, China holds say $1,000,000,000 this year. What are they going to do? Well, they could exchange dollars for euro's, pounds, francs etc..., but in doing so they would simultaneously devalue the dollars they hold by selling them all while revaluing the currency they are attempting to purchase. Which is why it is not efficient.

    To even further muddy the waters, Oil is only traded in dollars (although the Iranians are being bastards about gold and the euro), so naturally they will purchase oil using dollars (as will every other country). Therefore oil is a dollar denominated asset which further strengthens our reserve status.

    But buying too much oil could put upward pressure on the dollar price (similar to the currency situation), therefore they are forced to purchase other dollar denominated assets. Treasuries are the safest bet, which is why the Chinese purchase so damn many of them.

    Same goes with all of our trading partners.
    Last edited by Kushinator; 12-02-09 at 07:17 PM.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: Exclusive: Jobs 'Saved or Created' in Congressional Districts That Don't Exist

    So basically, because the dollar is the currency most international trade is based around, the dollar to keeps its value despite a large debt.

    Is this correct?

    I would agree if this is your point. The reason the US has remained the top contender in the international economy is not solely based on what it produces, but because it has been the center hub for international trade.

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    Re: Exclusive: Jobs 'Saved or Created' in Congressional Districts That Don't Exist

    Quote Originally Posted by drz-400 View Post
    So basically, because the dollar is the currency most international trade is based around, the dollar to keeps its value despite a large debt.

    Is this correct?

    I would agree if this is your point. The reason the US has remained the top contender in the international economy is not solely based on what it produces, but because it has been the center hub for international trade.
    That would be correct.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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