Sunday, February 27, 2005


The worriers about America's foreign debt are answered systematically here. A small excerpt: "The U.S. economy, according to doubters, rests on an unsustainable accumulation of foreign debt. Fueled by government profligacy and low private savings rates, the current account deficit -- the difference between what U.S. residents spend abroad and what they earn abroad in a year -- now stands at almost six percent of GDP; total net foreign liabilities are approaching a quarter of GDP. Sudden unwillingness by investors abroad to continue adding to their already large dollar assets, in this scenario, would set off a panic, causing the dollar to tank, interest rates to skyrocket, and the U.S. economy to descend into crisis, dragging the rest of the world down with it. Despite the persistence and pervasiveness of this doomsday prophecy, U.S. hegemony is in reality solidly grounded: it rests on an economy that is continually extending its lead in the innovation and application of new technology, ensuring its continued appeal for foreign central banks and private investors. The dollar's role as the global monetary standard is not threatened, and the risk to U.S. financial stability posed by large foreign liabilities has been exaggerated".

Outsourcing CREATES jobs: "The fact of the matter is, the most successful companies are outsourcers. And a Dartmouth study found that outsourcers are the bigger job creators. Since 1992, America has lost 361 million jobs, but during that same time, it also gained 380 million jobs - millions more than it lost. "Oh, I love my job now!" That's Shirley Bernard talking - the outsourcing "victim" the AFL-CIO wanted me to interview. At her old job at Levi's, the work was hot, noisy and physically difficult. Now, she's a secretary. She's paid more, too. She worries about the long term, and she's still an opponent of outsourcing, but she admits that many of her co-workers have moved on to better jobs. "Some of them have got, really got excellent jobs that they would never have even left Levi's for if the plant hadn't closed," she says. "This kind of forced them to ... to make a decision what they wanted to do and ... and they're really happy at what they do.""

From this article it looks like Latin America is continuing its policy of shooting itself in the foot -- attacking private enterprise and thus cutting off investment. They seem to be instinctively socialistic. Great way to stay poor! Excerpt: "Even less certain is how she and 130 million other Latin Americans will get clean water anytime soon in a region where providing basic services remains among the most pressing public health and political issues. Governments like Bolivia's tried the task themselves before, abandoned it as too costly, and turned to private companies in the 1990's. Today as privatization is rejected, foreign investment is plummeting across the region and the challenge is being returned to states perhaps less equipped than a decade ago. The trend is not unique to Bolivia, where a lack of clean water contributes to the death of every tenth child before the age of 5, and it has presented Latin American leaders with a nettlesome question: what now?"


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