Wednesday, November 10, 2010

A Note to our Conservative Friends

For ninety years now, we have had to listen to people like you shouting about how Democrats and Liberals are nothing but dupes and collaborators with Communism- claims that played a large part in your campaign strategy this year.

Well, what have we come to in the United States now?  The Fed is proposing injecting $600 billion into our economy.  This plan is approved of by a wide range of economists (many of whom don't think it goes far enough) and our government.  Who is strongly against it?  The Communist government of China.

We are now being treated to the spectacle of Republican politicians, who, as we know, just took large sums of laundered Chinese money to use in their campaign, siding en masse with the Communists, and against our own government, not even waiting until they are sworn in to begin their capitulation to the Communists.

Now we know who the real fellow travelers are.  I hope you are proud of yourselves for working so hard to turn our government over to tools of the Communists.  I can't wait to see how that works out for you.

6 comments:

Poll P. said...

I think you're saying that Chinese (and therefore Communist) money helped elect this round of Republicans, and that the newly-elected members are working to prevent U.S. government actions that the Chinese oppose?

Green Eagle said...

That about sums it up.

Lisa said...

The Chinese maybe Communist but they still don't want us to keep borrowing and spending.

Green Eagle said...

Lisa, your new congress members are selling themselves to the Communists before they are even sworn in. Aren't you proud of how smart and patriotic you were to put the country in their hands?

magpie said...

Lisa,

Over 40% of the US debt is owed to China and Japan. The interest on that debt is what is causing the deficit to balloon. Stimulus is what is keeping you alive. That and a persistent decision by countries like China to keep the US dollar as the reserve currency.

As problematic as you are, you still represent a market too valuable to be allowed to fail (for now), which is what would happen if they ever decided to dump all treasury bonds and switch their foreign exchange reserve investments back to gold. If another currency or medium of exchange replaces the US dollar as the world's reserve currency you are completely fucked, because the interest rates on investment would spiral and you'd never get off the ground again. If you chose to default, the US dollar would implode and inflation would go through the roof. Again you'd be screwed.

Until August 15th 1971 the US dollar could still be converted to gold on request. On that day Nixon's government declared that they wouldn't guarantee that anymore. The dollar should have been allowed to devalue then, but the investment world blinked and weren't prepared to see their assets shrivel relative to the actual strength of the economy. The evil day got put off. And put off. And put off. And now it's too late. Without life support the US economy cannot generate enough consumption.

This is what your side of politics either willfully ignores or seeks not to understand: you're on life support. Without stimulus, you will get weaker, until one horrible morning everyone sells what US dollars they have. This is why the US dollar is steadily falling.
Right now, the Australian dollar has parity and is actually worth a cent or two more than the US dollar.
Japan shit itself again in September over how high the yen has gone and intervened in the foreign exchange market. That didn't work because the US dollar is still falling.

Eventually it might get to a level that is correct relative to a compacted economy, but the US must produce and export again in order to survive. Export products that is, not export jobs. It won't be able to do that by letting the rich keep more and more money. It won't be able to do that by not bothering with scientific research. It won't be able to do that without proper infrastructure.
It won't be able to do that with Republican thievery.

Good luck.

Green Eagle said...

Magpie,

That was a truly excellent comment. It really summed up the "damned if you do, damned if you don't" corner into which Americans have painted themselves, by allowing their industrial base to vanish.

Thanks very much for the obvious effort you put into summing up the situation so concisely.