According to Mr Davidson, the world cannot risk America stopping. America's external deficit means an extra $500 billion is going into circulation in the world economy each year. If America reined in its current account, international commerce would suffer a liquidity crunch, as it did periodically under the gold standard. Hence America's deficit is neither a "meaningless concept" nor a lamentable drain on world savings. It is an indispensable fount of liquidity for world trade.
Reminds one of the words of a previous U.S. Treasury Secretary (John Connally): "It's our currency but it's your problem."
-----Ben
- Upcoming Class in NYC on Marx, Drewk Sat 14 Sep 2002, 14:17 GMT
- Greenspan and Stagflation, John Gelles Fri 13 Sep 2002, 22:44 GMT
- Article in Asia Times, Henry C.K. Liu Fri 13 Sep 2002, 22:41 GMT
- Article in THE ECONOMIST by Davidson, Ric Holt Fri 13 Sep 2002, 17:31 GMT
- Re: Article in THE ECONOMIST by Davidson, Ben Day Sat 14 Sep 2002, 14:16 GMT
- Re: Article in THE ECONOMIST by Davidson, Hugh Whinfrey Sat 14 Sep 2002, 15:28 GMT
- Message not available
- Re: Article in THE ECONOMIST by Davidson, William F Hummel Sun 15 Sep 2002, 01:07 GMT
- Re: Article in THE ECONOMIST by Davidson, Henry C.K. Liu Sun 15 Sep 2002, 05:08 GMT
- Re: Article in THE ECONOMIST by Davidson, Schulte-baeuminghaus Sun 15 Sep 2002, 17:27 GMT