Being a liberal in the empire
All this whining that someone might not get paid a union wage while rebuilding New Orleans is disgusting. Where do you think this $200 Billion USD is going to come from? They wont find $20 billion of "unnecessary spending" to cut, and they wont raise taxes.
We're going to borrow it. Today the Fed raised rates another quarter point and didn't even mention "fighting inflation" as the cause. They raised it to swell the bond rate for borrowing for New Orleans.
Well get a clue. We're not borrowing this kind of money from our selves. We can't even buy the bulk of our regular daily debt before we add Katrina to the bill. We're going to borrow it from the "world market".
Now don't get the idea that some wealthy old matron in Rio, Jakarta, Kabul or Nairobi is going to go out back and dig up the mason jars full of old Pound Sterlings to invest in New Orleans. It doesn't work that way. Instead, local investors in those cities will buy bonds in NY instead of investing in local enterprises.
That's right. Instead of money being invested in developing economies where it is desperately needed, the money will get vacuumed into NY to buy our debt. We've been doing this on an unprecedented scale for 5 years now. With Katrina added to the scam, we're talking over a trillion dollars that we've sucked out of the poor economies of the world. The "poor of the earth" are paying for our Porsche.
A CIA report on the background to 9/11 said, "they don't hate us for who we are, they hate us for what we do". How many terrorists do you think we'll get from New Orleans folks? Don't get me wrong, New Orleans was a great city and should be rebuilt.
But if we can't convince ourselves that a Chevy would do, or afford to tax ourselves a wee bit, or afford to borrow from our own children, then who the hell do we think we are to be borrowing it from the families of the earth who can least afford it? If you haven't a clue what the answer is, try wearing the label "Ugly American" for just one day. And if that offends any of your arrogant self-righteous liberal sensibilities, remember, the families in Rio, Jakarta, Kabul and Nairobi have other labels that would just make you scream "Unfair!".
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Interesting post. I don't know enough about international banking or any banking for that matter, to have known about this being a problem.
While I figure those countries we borrow money from are profiting off the interest we pay to them. I didn't think of it in terms of reducing the available capital pool in those countries, which would raise the interest rates citizens and businesses in those countries pay?
If so then yes it would fall into the "over consumption" category of Americans, which I agree is one of the ugly parts. (Not to mention the political and religious meddling in other's affairs parts.)
Anyone expert in banking reading? It would be interesting to here from someone who knows why these countries suffer from profiting off our interest. (Although it sounds like the capital pool goes down and thusly the interest rate to others rises.) Or perhaps the author him/herself is such an expert and can expound?
September 21, 2005 11:22 AM | Reply | Permalink
I admit to being somewhat confused by your post:
First, local investors don't necessarily divert funds from local enterprise. They finance our debt because they make money on it. There is nothing to suggest that they would otherwise invest locally.
Further, five governments finance the largest part of our debt and they do so to manipulate their own currency. The real danger is that these governments will quit buying our debt.
As to the wage, few are suggesting union wage, they are suggesting prevailing wage. Not being from the south, you are probably unaware that the concerned states are right to work states that do not have a significant union presence. I believe the suggestion is made to allow people who live in the area to earn a wage that will allow them to pay for their personal recoveries themselves. A poverty wage won't do that.
Finally, as you sound like, at the very least, a fiscal conservative, I'm surprised that you point to whining, self-righteous liberals for undermining international local enterprise investment, when quite the opposite is true. It is the very people who claim to be conservatives - a Republican Congress and a Republican executive branch - who are entirely responsible for the over one trillion dollar deficit you now point to.
I agree - let's trade dollars rather than spending more. I'm for rebuilding New Orleans, rather than rebuilding Iraq - funding local enterprise development and all.
September 21, 2005 12:14 PM | Reply | Permalink