Comments on: Barack’s Bailout Bonds http://bluecrabboulevard.com/2009/07/06/baracks-bailout-bonds/ Summum nec metuas diem, nec optes - Marcus Valerius Martialis Tue, 02 Aug 2011 22:27:18 +0000 hourly 1 http://wordpress.org/?v=3.0.4 By: The Strata-Sphere » I’m With Kristol On Palin - Kinda Of http://bluecrabboulevard.com/2009/07/06/baracks-bailout-bonds/comment-page-1/#comment-85363 The Strata-Sphere » I’m With Kristol On Palin - Kinda Of Tue, 07 Jul 2009 13:46:58 +0000 http://bluecrabboulevard.com/?p=12873#comment-85363 [...] Reader Crosspatch noticed a dire prediction of 14% unemployment as the possible result of Obamanomics (with help from Reid and Pelosi): The BEA [...] [...] Reader Crosspatch noticed a dire prediction of 14% unemployment as the possible result of Obamanomics (with help from Reid and Pelosi): The BEA [...]

]]> By: crosspatch http://bluecrabboulevard.com/2009/07/06/baracks-bailout-bonds/comment-page-1/#comment-85348 crosspatch Tue, 07 Jul 2009 07:03:32 +0000 http://bluecrabboulevard.com/?p=12873#comment-85348 From the linked article "The money to buy these bonds will have to come from somewhere, and much of it will come from people who would otherwise invest in starting or expanding businesses. " That is true but the money comes from whoever we run a trade deficit with. If we start running a trade surplus, we are in deep doo doo. I know that sounds counter-intuitive but that is pretty much how it works. If you run a trade deficit, the money comes back in the form of investment in your debt. If you run a surplus, the money must come from domestic sources which clobbers your production. Deficit spending combined with a trade surplus is the recipe for certain disaster. This is old but it describes it better than I can: http://www.freetrade.org/node/61 From the linked article “The money to buy these bonds will have to come from somewhere, and much of it will come from people who would otherwise invest in starting or expanding businesses. ”

That is true but the money comes from whoever we run a trade deficit with. If we start running a trade surplus, we are in deep doo doo. I know that sounds counter-intuitive but that is pretty much how it works. If you run a trade deficit, the money comes back in the form of investment in your debt. If you run a surplus, the money must come from domestic sources which clobbers your production. Deficit spending combined with a trade surplus is the recipe for certain disaster. This is old but it describes it better than I can:

http://www.freetrade.org/node/61

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