This is interesting: Senator Clinton doesn't seem to understand some basic economic theory.

[Clarkie1]

Was just listening to KGO newstalk (ABC) in San Francisico. Bob Brinker, an investment advisor whom I have great respect for, was pointing out some frustration at Senator Clinton's contention this week that other countries investing in U.S. Treasuries is somehow dangerous to the U.S. economy. In fact, it's just the opposite. Did a quick google search and found this, which sums it up pretty well:


Should we block foreigners from investing their dollars in US Treasury securities? Wait a minute, let’s think about that a little harder before we decide. Wouldn’t that undermine those foreigners’ opinion of all those dollars they hold in such high esteem today, and make them more inclined to sell those dollars for other currencies? Wouldn’t that cause the dollar to fall, inflation to rise, and the economy to tank? Wouldn’t that precipitate the very thing we do not want to happen?

Hillary Clinton has confirmed, in no uncertain terms, that one of the most irresponsible things we voters can do is to allow our politicians to do our thinking for us. Her latest foray into economics—or, more accurately, politics attempting to masquerade as economics—is not only based on a false premise, but proposes a “solution” that is a dangerous threat to the US economy. All of this presumably in the name of pandering to her left-wing base. Is nothing sacred?

Hillary has set up the false, straw man economic “threat”—that foreign governments, especially China, have invested too many dollars in US Treasury securities. To defeat that straw man, she is proposing that we take appropriate action to “ensure foreign governments don't own too much of our public debt."

There is so much that’s wrong with Hillary’s dangerous political rhetoric I hardly know where to begin. So I’ll just start with the facts that Hillary apparently never checked before committing to her ill-advised political gambit.

more....http://www.optimist123.com/optimist/

It's a little disconcerting that one of our leading candidates seems to lack a basic understanding of economic theory. I can't imagine Clark (er, for example ;-)) ever making such a mistake as this...he does a master's degree in Economics, after all. (Couldn't resist that little plug).

One of the callers was joking about requiring politicians running for office to pass a basic test covering keeping a budget and ecomonic theory. Of course, the constitution would never allow that, but...certainly would help if more politicians did have such a basic understanding, don't you think?

[Syrinx]

1. Hillary...

Isn't she just saying that we shouldn't "rely on the kindness of strangers" so much? You know, the way things stand today, China could ruin us economically overnight, should they choose to do so.

[Clarkie1]

2. She has it backwards.

We are "holding China hostage" with them holding so many of our treasury bills, if anything. She seems to be confusing foreign governments owning equities with foreign governments holding debt, which is an entirely different thing.

[Syrinx]

3. gotcha

I openly admit that Economics was absolutely my worst subject in college. :)

[youngdem]

6. Um, NO she doesn't.

If China stopped attending our T-bill sales, our government would run out of money in days and would quickly grind to a halt, and we would be faced with having to either:

-cut AMAZING amounts of spending
-dramatically increase taxes
-print money and spur inflation like South America


China feeds our deficit spending, and since we spend more than we take in every day (except maybe April 15th), we would be SUPER FUCKED if China decided to stop funding our credit line by stopping the purchases at the Treasury sales.

As far as us having leverage over China because of the bonds (I guess you suggest that we would default), they have a few hundred nukes and an army a few dozen miles from Taiwan and our troops in South Korea that say differently. They could also revalue their currency quickly and make prices at Wal-Mart look like Macy's, and we don't have the domestic manufacturing capacity to do anything about that quickly.

Heavy deficit spending funded the way we fund it makes us beholden to foreign countries in VERY uncomfortable (and limiting) ways.

[Alamom]

4. Did you read all of this site or just the part bashing Hillary? This guy is a Reaganomics freak.

Or do you agree the Reagan years were good for America?

Pardon me while I listen to Hillary...China owns us. Glad she knows.



(exerpts from Mr. Conover's idol worship of Reagan, the economy of that era and what it is doing for us still)same link



John Patrick Diggins has written a new biography about Ronald Reagan; it was reviewed by Russell Baker in this article. The book is on its way to me, and will be a welcome addition to my Reagan collection, right next to Lou Cannon’s books (Governor Reagan and President Reagan).


>
I’m starting to think that it will take Reagan’s historians and supporters forever to catch on to the Core Principle he upheld with so much conviction, to our everlasting benefit. (His detractors will never admit it even if they did catch on, but that’s just petty politics, not logic.)
Every time I see the skyline of a great American city, including the one near me, I give Ronald Reagan copious credit for that skyline’s still being there, still growing larger, still roaring with activity.
Reagan-era borrowing enhanced national security; enhancing of national security ended the Cold War.


>
Therefore, Reagan-era borrowing was a fantastically successful investment in a brighter future for every subsequent generation of Americans—precisely the opposite of the tarred reputation it has been given by short-term-thinking political ideologues who should definitely not be confused with statesmen.

>
National security is a precious asset, in which Reagan invested heavily—not an ugly surplus-killer, as it was viewed by at least one subsequent president.


http://www.optimist123.com/optimist

[Clarkie1]

5. Reagonomics freak or not, he's right about Senator Clinton being wrong on this one.

I only visited this site after listening to KGO radio, hosted as I said by Bob Brinker, who's economic views I greatly respect. He knows what he's talking about.

On, this Senator Clinton clearly doesn't know what she's talking about.

That is all. Off to enjoy the beautiful weekend...

[mtnsnake]

9. Hard to believe you gotta side with a Reaganomics freak to make a pt about Hillary

Jeesh!

If she doesn't side with the Reagonomics freak, as you say she doesn't here, then she's a loser. If she sided with the Reaganonomics freak, and I'm glad she doesn't, she'd be crucified for being a Reagonomic herself. Hillary can't win with you either way.

[Clarkie1]

10. It has nothing to do with the "Reagonomics freak"

I know nothing about the person who wrote that article, except he agrees with the views of someone whos views I respect and makes sense (see OP). It has to do with basic economics 1A.

And I didn't say she's a loser...don't put words in my mouth! I said she is wrong on this point!

[mtnsnake]

12. okay okay

Calm down. Sorry if I put words into your mouth. I hate when someone does that to me, too. Anyway, have a good weekend.

[AJH032]

16. Actually, I agree with Clinton, and so does Clark

both have the opinion that paying down the debt is a good thing.

[Tellurian]

19. Yes, I agree with Sen Clinton..

How could it not be a good thing?

[Clarkie1]

11. It's not bashing. It's respectful disagreement.

Or is that not allowed around here anymore?

[gratuitous]

7. Nice to see where my increased productivity is going

The productivity of America's workers has been going steadily up for the last couple of decades, but real wages have been stagnant or falling all during that time. In the 1990s, when 30 years of fiscally ruinous Republican economic policies were finally being reversed, and the national debt was at last being paid down, George W. Bush came along to run up enormous annual federal deficits all over again.

Instead of having the fruits of our increased productivity in our own pockets or at the very least being used to support and improve public works like roads, bridges, and schools, it's going out of the country to line the pockets of investors who buy up those notes and debts.

Lovely.

[Forkboy]

8. I was going to read it until I saw the link

Anything with the word "optimist" in it is sure be disagreeable with me,an eternal pessimist.

[A Simple Game]

13. Your header should say "some(one's) basic economic theory"

Good for Hillary, I am sick of these politicians that think money grows on trees. I'll even bet that your parents told you that money didn't grow on trees when you were younger.

Try spending more money than you take in every year, year after year, and see how far you get with your home finances.

Excuse me in advance if I am wrong, but didn't you post at least three anti-Hillary thread in less than two hours about two weeks or so ago?

You say you are a Clark fan, tell me why I should be a Clark fan, instead of telling me to be a Hillary hater.

There are also several "Economic theories", at least one for every economist with a large head, they aren't all right, nor are all but one wrong.

[mtnsnake]

17. Best * Post * OF * The * Thread

You say you are a Clark fan, tell me why I should be a Clark fan, instead of telling me to be a Hillary hater.

Amen, bro!

[A Simple Game]

18. Now look what you did!

You made me blush.

Thanks for the compliment mtnsnake, especially nice coming from a fellow Northern New Yorker.

[madrchsod]

14. no shit -hillary better get better economic advice

before she says anything more about foreign debt. it`s a mutual assured destruction treaty -if we go done the drain so do they.

[paulk]

26. did you check out the site this link is to?

as others have pointed out, that site is run by a supply side Reaganomics guy.

I hardly think Hillary, or any Democrat, needs advice from this guy.

[AJH032]

15. Too much foreign owned (or any) debt can be bad

It puts upward pressure on interest rates, and makes it hard to acquire more (perhaps needed) debt in the future, when our debt will be so large that virtually 100% of tax dollars are being used to pay interest on the debt. Think of your own personal FICO score--if you kept piling on debt and not paying it back, isn't it a lot harder to get a loan in the future? It doesn't take a PhD in Economics to tell you that.

[Tellurian]

20. I found some really good info that sheds some light on the subject ..

Indirectly, this info applies to Hillary's quote in your OP. Assuming your quote is accurate:

"Was just listening to KGO newstalk (ABC) in San Francisico. Bob Brinker, an investment advisor whom I have great respect for, was pointing out some frustration at Senator Clinton's contention this week that other countries investing in U.S. Treasuries is somehow dangerous to the U.S. economy. In fact, it's just the opposite. Did a quick google search and found this, which sums it up pretty well."

posted by ribofunk:

"A Falling Dollar Does Not Mean a Collapse is Inevitable

Despite the completely irresponsible budgets of the Bush and Reagan, the US is not in too bad a financial condition compared to other developed countries. It appears that the tide is turning to reverse some of these ridiculous policies. That in turn will cause the dollar to rebound against other currencies.

Inflation is probably inevitable because of demand for commodities and revaluation of Chinese currency. But the country will survive just like it did through the 1970s.

As for the survivalist recommendations, ask yourself whether someone who adopted these resolutions 40 years ago would be better prepared for retirement than someone who found a decent career and followed a responsible financial plan. In any case, it is a good idea to get rid of debt, save, live below your means, and have more than one way of making a living."

"The US debt ratio is now about 65%, which is lower than most European countries, even notably conservative Germany and France. Japan's debt ratio is about 170%, more than twice the US. What is disturbing is the rapid deterioration caused by Bush's irresponsible tax cuts. That has to be corrected, and I think it will be, at the latest when the tax cuts expire.

As far as developing countries, Uruguay has a debt ratio of almost 800%. That creates the kind of massive burden of interest payments that cripple a country.

To predict an economic collapse based on similarities with the 1920s is not a very compelling argument -- the differences are far greater. There was no Federal Reserve to set interest rates or regulate the money supply, and when it was created, it made the situation worse by perverse conservative economics. They money supply actually shrank by 30% during the depression when what was needed was a massive infusion of capital.

Unevenly distributed wealth does not create the healthiest economy (and is fundamentally unfair), but it does not cause financial collapse without other factors that don't exist here such as debt rejection or capital flight. There have been unequal societies which have existed for centuries without the inequality causing a long-term depression.

Now, there may be recession, and it's prudent to save and pay down debt. But taking a survivalist approach because of the US debt and economic imbalance is like moving the wilderness in anticipation of Y2K

.

[Mass]

21. Not sure if I understand you. Your contention is that China owning a large part

of the US debt is not a problem for the US and could not allow China to influence the US economical and strategic decisions?

I am not sure if this is what you said, but if it is, I certainly need to see the foundations of such a claim?

[Submariner]

22. "Great respect" Brinker is a sleazy con man

I followed his advice many years ago to put 60% of holdings into QQQ at $70, only to watch it plummet to about $32., it's about 42 now.

If you factor QQQ into Brinker's portfolio's, he'd still be showing in the red. The POS never acknowledges this stinker of a stock call.

http://investment.suite101.com/discussion.cfm/5340#message_14

[sendero]

23. What utter horseshit..

.... I am a well known and unapologetic HRC basher here, but it isn't her who's full of shit on this issue.

The issue of foreign debt holders isn't near as cut and dried as the supply-side moron here is saying. It is a very very complex issue, and is AT BEST neutral in terms of its desirability.

[Trajan]

24. Again .. I will NOT hold Clark responsible ...

For the behaviour of his supporters here ....

If Hillary (or Clark) wins the nomination ... she (he) gets my vote ...

That will be a fact if you post a million negative threads about ALL the non-Clark candidates, or zero threads ....

[Tellurian]

25. Pertinent article relating to Today's Economy and the Two-Fold threat

...imo...the news is dire. Thanks to the Bush Gang..

Everbank’s Chuck Butler put it like this: “Not only did the buying stop by foreigners in December, but the outflows were huge! Domestic investors increased their buying of long-term overseas securities from $37 billion to a record $46 billion. This is a classic illustration of ‘lack of funding.’ So, the question I asked the desk was . . . ‘Why isn’t the euro skyrocketing?’”

Why, indeed? Why would central banks hold onto their flaccid greenbacks when the foundation that keeps it propped up has been removed?

The answer is complex but, in essence, the rest of the world has loaned the US a pair of crutches to bolster the wobbly dollar while they prepare for the eventual meltdown. China and Japan are currently holding over $1.7 trillion in US currency and US-based assets and can hardly afford to have the ground cut out from below the dollar.

There are, however, limits to the “generosity of strangers” and foreign banks will undoubtedly be pressed to take more extreme measures as it becomes apparent that Team Bush plans to produce as much red ink as humanly possible.

December’s figures indicate that foreign investment is drying up and the world is no longer eager to purchase America’s lavish debt. The only thing the Federal Reserve can do is raise interest rates to attract foreign capital or let the dollar fall in value. The problem, of course, is that if the Fed raises rates, the real estate market will collapse even faster which will strangle consumer spending and shrivel GDP. In other words, we are at the brink of two separate but related crises: an economic crisis and a currency crisis. That means that the unsuspecting American people are likely to be ground between the two mill wheels of hyperinflation and shrinking growth.

In real terms, the economy is already in recession. The growth numbers are regularly massaged by the Commerce Department to put a smiley face on an underperforming economy. Industrial output continues to flag (in January it was down by another .5 percent) while millions of good-paying factory jobs are being airmailed to China where labor is a mere fraction of the cost in the USA. Also, automobile inventories are up while factory production is in freefall.

In addition, new jobless claims soared to 357,000 in the week ending February 10. Forty-four thousand more desperate workers have been given their pink slips so they can join the huddled masses in Bush’s Weimar Dystopia.

December’s net capital inflows are a grim snapshot of the looming disaster ahead. As the housing bubble loses steam, maxed out American consumers will face increasing job losses and mounting debt. At the same time, foreign investment will move to more promising markets in Asia and Europe, causing a steep rise in interest rates. This is bound to be a stunning blow to the banks that are low on reserves ($44 billion) but have generated $4.5 trillion in shaky mortgage debt in the last 6 years.

It’s all bad news. The global liquidity bubble is limping towards the reef and when it hits it’ll send shockwaves through the global economic system.

http://onlinejournal.com/artman/publish/article_1777.shtml
.
.

[SaveElmer]

27. As if we needed further proof...for some no source is too right wing...

If it aids in bashing the Clintons...

[Tellurian]

28. Well, I'm not usually willing to cut anyone some slack..

only on certain occasions...when it comes to Hillary.

They say, I'm too biased. So I'll give this time.. Only this time..

The article, I posted is scary and virulently dire. But it does drive the point home,
Hillary, as usual, IS RIGHT!