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Post by DAS (formerly BushAdmirer) on May 17, 2010 22:25:42 GMT
is.gd/cdITnThe World Gets Fiscal Austerity Fever, As The UK Unnecessarily Commits Economics Suicide Marshall Auerback TheBusinessInsider.com Virtually the entire world’s press is now focusing on the travails of the euro zone, but continues to draw the wrong lessons from what now afflicts the region. But Americans might be pleased to know that this collective economic insanity is not restricted to the pages of the right wing press or the rantings of Fox News commentators such as Glenn Beck. No America, you can rejoice! This has become a fully fledged global disease. You are not alone. As I have pointed out before, no euro zone government issues its own currency. Consequently, they have to “finance” every euro they spend. And, as Bill Mitchell notes, if tax revenues do not cover pre-existing spending desires, then all of these countries (including Germany) have to issue debt. The current crisis is manifested by the bond markets’ unwillingness to lend to the PIIGS governments any longer because they are beginning to query the PIIGS’ national solvency. These funding constraints do not apply to the US government, which is sovereign in the US dollar and can never be revenue constrained. The same applies to the UK government, although to judge from the comments of the new coalition Conservative-Liberal Democratic Government Cabinet, one would be hard-pressed to discover that fact. Will someone please remind the UK’s new Chancellor of the Exchequer, George Osborne, that the UK is not Greece? Osborne attended Eton, one of Britain’s elite private educational institutions, but they clearly didn’t do a good job of teaching him economics out there, if one is to judge by his recent statements: “If anyone doubts the dangers that face our country if we do not, they should look at what is happening today in Greece and in Portugal.” The UK is a sovereign nation that issues its own currency and freely floats it on foreign exchange markets. Perhaps the keyboard operators have gone on strike (like British Airways), or the country has a paper shortage and can no longer write checks, but given the plethora of comments emanating from virtually all members of the UK commentariat, one has to assume plain ignorance. Just today, the incoming Chief Treasury secretary, David Laws, warned the British electorate that the UK has well and truly “run out of money.” Hold on to those pounds, or you’re doomed. Read more: is.gd/cdITn
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Post by mouse on May 18, 2010 10:14:25 GMT
i would disagree with the above item...we are broke...however we have one priceless asset... the people...to be broke is not the end of the world as we know it..nor is it stupid to admit...what would be stupid would be to continue down the road of the fools paradice.... when down the only way is up..... as has been said..we are not greece....we could well be if nothing were done...it will be a dodgy time
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