How Long Will Global Investors Finance US Spending (Deficits)--Chi Trib

[Gloria]

http://www.chicagotribune.com/business/chi-0501020007jan02,1,1251749.story?coll=chi-business-hed

Deficits a growing danger
How long will global investors finance U.S. spending?

By Michael Oneal
Tribune staff reporter
Published January 2, 2005

On the face of it, 2005 is shaping up to be a pretty good year for the economy.

SNIP

The danger is that the gradual falloff in the dollar's value could turn into a plunge if foreign governments get skittish about the long-term prospects of the U.S. economy. That would put heavy upward pressure on interest rates, which could cause the economy to stall. It would also threaten the value of the housing and stock investments that have increasingly become the backbone of U.S. consumer finances.

Coordination expected

Since a slumping U.S. economy is not in anybody's interest, most experts expect economic policy officials around the world to seek ways to keep the situation stable by coordinating efforts to support the dollar if need be.

But economists like Harris say the Bush administration and Congress will have to show that they are serious about cutting the federal deficit. That explains why the recently completed 2005 federal budget reduces funding for everything from Pell grants to the National Science Foundation. It also explains the growing pressure on President Bush to explain more clearly how he intends to pay for things like Social Security and tax reform.

"How has Social Security been sold?" asks Harris. "They've said, `We'll give you control.' But they haven't talked about cutting benefits."

The economy may keep growing in 2005. But it also may turn out to be the year the U.S. begins to pay the piper.

[indepat]

1. Reduced funding for Pell Grants and the National Science Foundation are

solely about ideology, absolutely nothing else.

[peacebird]

2. ah - but they ARE talking about reducing SS benefits by a third

tell me - will the red staters stand for having SS cut? just curious.... and how will congress react when joe six-pack starts screaming about ma & pa are losing their "retirement"?

and when the aarp lights a fire under the gray panthers re: medicare cuts and such?

will the chickens ever come home to roost? will * and his evil neocon cabal ever have to pay the piper?

:grr:


will the fundies ever wake up from their massive rightwing wetdream and realise what they have wrought?

[indepat]

3. And everyone eligible to register who did not vote for Kerry ratified all

this and everything else.

[PurityOfEssence]

4. Subsidize the rich; hey, at least they're consistent

There's a sick belief among conservatives that the rich are gods-on-earth without whom we'd all perish. That's why we have to buttress them from any vulnerability and sustain them as they screw us.

This is just a worldwide version of the same thing: we're going to do as we damned well please, spend ourselves silly and bully the rest of the world, and they'd damn well better sustain us, or we'll take the whole temple down with us.

Maybe it's not in anyone's interest for us to crash, but maybe that's not quite true. Beyond that, the problem is so elephantine that our regular enablers might not be able to save us.

What idiotic, blustering selfishness we're engaging in.