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2004-07-16 Home Front: Politix

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Posted by Steve 2004-07-16 11:21:32 AM|| || Front Page|| [1 views since 2007-05-07] Top

#1 a $400 billion deficit is bad

not as bad as a $500 billion deficit but still bad

the problem for Kerry is that the only way to reduce the deficit and retain allegience to the dem party is to raise taxes

Posted by mhw 2004-07-16 2:56:09 PM|| 2004-07-16 2:56:09 PM|| Front Page Top

#2 A $400 billion deficit is not bad, neither is a $500 billion dollar deficit. The federal deficit is only one piece of the US deficit structure, the current account deficit. The current account deficit is what matters, not the one piece that the fed does. The federal deficit is a way for americans to borrow at a ridiculously low interest rate (far lower than we could personally). If we lowered the deficit we'd have to increase personal borrowing to maintain our standard of living, thus paying a far higher interest rate.

As it stands our foreign income off of our investments in equity and debt abroad are 10s of billions greater this year (and historically billions greater every year) than our foreign payments to foreigners who own US equity and debt. Being that we have a current account deficit (not a surplus) this means we're borrowing at an effective negative interest rate. I don't know about you but if I was offered a negative interest rate I'd borrow as much as I could.

Posted by Damn_Proud_American 2004-07-16 4:50:27 PM|| [http://brighterfuture.blogspot.com] 2004-07-16 4:50:27 PM|| Front Page Top

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