Assets = Liabilities + Equity Aggregate Private Financial Assets = Aggregate Private Financial Liabilities + Government Debt Government Debt = Private Net Equity = Net Savings Government Deficit (- Trade Deficit) = Net Profit + Saving (both domestic) Government Debt *reduction* = Private Net Equity *reduction* Government Deficit *reduction* = (Net Profit + Saving) *reduction* Seems true, with a few expressions being dropped (like the needlessly huge trade deficit). SEEM! Monetary devaluation! We are outrunning a HEAP of it, and if we keep on our current path, it WILL catch up with us in such a rush that we will have no chance to respond (far future, but worth mentioning). Inside this devaluation (triggered by deficit spending, and delayed by private debt), there is another monster hidden. These profits and savings mentioned above never reach about 80% of the country. Further, a decent portion of our deficit goes to funding two horrible things. One is paying to prevent progress (Farm Subsidies fall into this category). Another is paying to widen our trade deficit (oil subsidies). Deficit spending is NOT the key. Government spending is. It MUST be done in an intelligent manner. I gave an example before; if a nation subsidizes the import of wheat to feed its people, but subsidizes the export of wheat to stimulate trade, they will run a HUGE deficit. In that deficit, no financial gains are made. Taxes NORMALLY hurt economic profiles, but when the taxes move money from places of growing stagnation to places where they will be spent, they become effective. Taxes on overseas business (which would require us breaking abusive trade agreements we never should have entered) would not only reduce trade deficit, but increase government spending WITHOUT harming domestic productivity. Mike Wright, I put it here to avoid cluttering your wall, but feel free to share further.
Posted on: Tue, 04 Mar 2014 03:07:45 +0000
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