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Archive for the ‘Politics’ Category

How much does the National Debt really matter?

Posted by Brian Becker on February 14, 2009

I was watching a recent speech by Nobel prize winning economist Paul Krugman on earier (awesome site btw). During the Q&A portion, he was asked how the United States can remain sovereign with how much we are beholden to other nations (specifically China) to finance our government debt. This is something I’ve thought about a lot but since I’m not an economist I never really knew the answer to. He quoted the old adage “If you owe the bank a thousand dollars, you have a problem, but if you owe the bank a million dollars, the bank has a problem,” and it made me think of our relationship with out debt financiers a bit differently than I had before. Its not entirely clear who has the upper hand in this relationship.

If you think about it, China has as much to lose as we do financially if the American economy tanks for a few reasons. If our dollar devalues, they are losing money are their investment because they are holding so many of our dollars, and if American’s consumption drops off a cliff as it has begun to do as the recession deepens, China’s own economy will suffer as people will be laid off due to lower revenue streams for their manufacturers. The USA needs China to make our crap, and China needs the USA to buy their crap. Its an interesting trade relationship.

I always kind of knew this part, but as Krugman explains, most countries have a debt as large as ours with regard to the size of their own economies. Not in real numbers of course, but our economy is much larger than say, France, so you can’t realistically compare them that way. Similarly, our ability to pay off that debt is so much greater because we have a much larger tax base than most countries of the world. I didn’t know that, and put into that perspective, it almost seems like the debt hardly matters at all.

One other thing that got me thinking about this was the news earlier in the week that said China has stated that they will keep buying US treasuries despite the fact that they know that the dollar is going to devalue. Here’s the exact quote from the article in the Financial Times:

“Except for US Treasuries, what can you hold?” he asked. “Gold? You don’t hold Japanese government bonds or UK bonds. US Treasuries are the safe haven. For everyone, including China, it is the only option.”

Mr Luo, whose English tends towards the colloquial, added: “We hate you guys. Once you start issuing $1 trillion-$2 trillion [$1,000bn-$2,000bn] . . .we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do.”

That was the director-general at the China Banking Regulatory Commission, which is the person that makes these kinds of decisions. Notice where he says “We hate you guys.”? China has no other choice but to finance our debt right now. Even if they wanted to stop, they couldn’t without devastating consequences in their own economy.

Sure its woefully irresponsible to be creating so much debt, but at this point we owe the bank a million dollars. The bank has a problem.


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Obama’s Critics of the Left.

Posted by Brian Becker on December 1, 2008

Frank Schaeffer’s latest blog on the Huffington Post sums up pretty well my thoughts on the various liberal critics of Obama’s appointments who seem to be popping up all over the web, and a few on T.V. (Rachel Maddow anyone?). I consider myself a liberal, but at the same time I’m a political pragmatist, much like Obama, so personally I am not at all surprised by most of Obama’s appointments so far. Anyone who read The Audacity of Hope should know that Obama is not guided solely by an ideology. While he is definitely a liberal, his positions are also laced in nuance, and he likes to listen to other people’s ideas, even if they challenge his own. This was one of the things that made me enthusiastic about supporting Obama after Biden got knocked out of the running after Iowa.

Those ideological purists on the left are just as bad as those on the right, because they don’t understand how things really work. If anything, Bush’s presidency should be an example of how a purely ideological driven administration fails to lead anyone but their own side, and even eventually loses them. I may not be enthusiastic about Clinton as Secretary of State, but I’m willing to let her prove that she can do the job. If she turns out to be a failure though, I won’t be holding my tongue.

My brother is one of those ideological purists that I’m talking about. He voted for Nader in 2004 and 2008 because, according to him, our vote doesn’t matter anyway since NY always goes for Democrats (mostly true), but also because he sees being against gay marriage but for civil unions as hypocritical. I don’t disagree with that but its obvious to me that taking this position is just political posturing. In reality, anyone who is for gay marriage is unelectable in a national election in this day in age. It at least shows that their heart is in the right place on the issue, and that there’s a chance that they will show some political courage once in office to make the change. The alternative is someone who doesn’t believe in either, and in that case there is no chance for change. That isn’t acceptable to me, so I don’t think throwing my vote to a third party candidate who has no chance of winning is justified just to keep my ideological principles intact.

So how does that relate to Obama’s appointments? What I like to refer to as “Change trolls” seem to think that Obama should only appoint people who pass an ideological test, such as being against the Iraq war since the beginning, and people who agree with him on virtually everything. I submit to them, how is that any different than Bush’s appointments besides the fact that they be left wing ideologues instead of right? If Obama brought in an entire team of government novices like Bill Clinton did, the change he plans to implement via legislation would likely be hampered by people not knowing the ways of Washington. Having a lot of people who served under Clinton and come from the Senate or the House is a good thing in my eyes, because it proves that he cares about actually getting his agenda implemented as fluidly as possible.

To me, the most important change Obama can deliver (besides restoring the constitution) is competence in government. It sure would be nice to know that our leaders are once again working to do whats best for all of the American people instead of just “my” people or “their” people.

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Things I’m Glad To Be Rid Of.

Posted by Brian Becker on November 13, 2008

Now that the election is over, there are a few things I’m really happy won’t be around anymore polluting my television.

1: Sarah Palin – although apparently she isn’t going away.  Maybe she didn’t get the memo, but she lost! Why is she giving more interviews and press conferences in the week after the election than she did during the entire campaign?  Go away, and for the love of god don’t come back.

2: Joe the Plumber – seriously this guy is a moron.

3: Tucker Bounds – possibly the worst spin doctor any campaign has ever hired.  It was painful to watch this guy struggle daily through T.V. interviews.  Not only is he a smug prick, hes not even good at lying to the American people, which was his job.

4: Nancy Pfotenhaur – another spin doctor for the McCain campaign.  Not as obviously bad as Tucker Bounds but she has something else about her that irks me.  Her extremely long neck.  Seriously what the hell?

I’ll edit this if I think of anything else.

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