******************** POSTING RULES & NOTES ******************** #1 YOU MUST clip all extraneous text when replying to a message. #2 This mail-list, like most, is publicly & permanently archived. #3 Subscribe and post under an alias if #2 is a concern. *****************************************************************
Daniel Lindvall wrote: "The financial markets (i.e. the ruling class) react one way when spending goes to bailing out businesses (or buying more guns), and in an entirely opposed way when it goes to improving the lives of the working class and the general population." What Daniel is implying is that the financial markets are controlled by the political decisions of the capitalist class. Another version of this same view is the one that claims that US and European capitalists crashed the price of oil for political ends - possibly in order to destabilize a then-radical Chavez regime. I disagree. Capitalism has its own laws of motion and not even the most powerful capitalists can override those laws. As far as budget deficits: yes, they do matter... in almost all countries. The laws of the market dictate that if there is an increased supply of a currency and it does not correspond to an increase in production on which to spend that currency, then it will require more of that currency to exchange for products. Internationally it means that capital will tend to leave that currency. In other words, inflation. The US is in an exceptional position because of the role of the dollar in international trade and finance. The fact that to this day the US economy is still the strongest and most stable has made the dollar universally more desirable. By floating increased amounts of dollar-based debt, what the US is doing is making international capitalists pay for their spendthrift ways at home. That cannot continue forever, especially as US capitalism is being challenged by Chinese capitalism. Yes, debt does have to be repaid. Or, put another way, the US government does have to pay back those loans/bonds and T notes, or at least there has to be confidence that it will do so. At some point, as the world becomes flooded with dollars, the only way that the US government can maintain that confidence will be to increase the interest rate paid on those instruments. Does anybody think that won't have an affect? John Reimann -- *“In politics, abstract terms conceal treachery.” *from "The Black Jacobins" by C. L. R. James Check out:https:http://oaklandsocialist.com also on Facebook _________________________________________________________ Full posting guidelines at: http://www.marxmail.org/sub.htm Set your options at: https://lists.csbs.utah.edu/options/marxism/archive%40mail-archive.com
