Re: [Pen-l] WSWS on Obama budget

[Jim Devine <jdevine03@xxxxxxxxx>]

Patrick Martin of WSWS says:
> ... There is no discussion in the budget outline of where these vast sums [of Obama's budgeted borrowing] will  come from. Given the worldwide financial crisis, US borrowing on such a scale means that the American government will be competing with—and effectively denying funds for—the governments of other, weaker capitalist powers, many of which have already had to resort to borrowing from the International Monetary Fund to avoid financial collapse....<

it's true that US government borrowing can "crowd out" foreign
borrowers, but all else equal it drives up the US$ exchange rate and
hurts US exports. In addition, there's nothing that says that the IMF
could be allowed to expand the volume of loans.

> For all Obama's rhetoric about renewing and reviving the economy, the budget figures have a stark meaning: the US government is bankrupt, the US economy moribund. The crash of 2008 marks, not a conjunctural crisis, even of immense magnitude, but a turning point, one that marks the long-term decline of American capitalism and the irreversible loss of its position of world  domination.<

The US is FAR from bankrupt. That is, it can pay interest on its debt.
Maybe the US is in decline (and godnose that Bush tried hard to make
it that way), but so far the US$ hasn't lost its "safe haven" allure
to those outside the country.
-- 
Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
way and let people talk.) -- Karl, paraphrasing Dante.
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