House of Paine

uncle's global full employment trade deficit

 
 the role of uncle 
as spender of last resort
         has its win win side

      and its hardly all con
           to ask 

" how much bigger should
uncle's foreign trade deficit  be
if we want a better world  ?"


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  our popular press on this 
has not been very good 

seems 
on a bigger stage
we're sort of
where  federal deficit policy
 press talk 
was 
 prior to 
say
                the "new fronteer" tax cut 
when keynes' kids finaly 
managed 
to force 
 the eliter elements in the media 
 to "get "
the "full throttle" multiplier notion

of course 
 the scientific brake thru 
and its obviuos policy consequences
             goes all the way  back to the 1930's
                  back to the total 
                         system failure
                              and human  horrors 
                                of the world's 
                                    last great depression


  still and all
like male homosexuality
    the mass   press really 
                   pretended not to notice  

    today we have a similar blind eye set up 

the lessons 
of the sovereign  deficit 
win win
are hardly 
allowed to get injected 
into the popular blood stream 

especially 
        here in the land of the free
----------------------------------------------
and this 
despite the million
 or so young americans
 who take college macro 101
                    each year 

at the freshman level
    keynes has a far harder slog then darwin !

---------------------------------------------
  but putting aside 
the ironies
  of klass over klass policy wars

and simply
  looking at the science of it all

one can ask
  about uncle's fiscal deficit

  how big 
is big enough ?

thats is 
to make
 the whole world's production system 
                                  run  at full throttle ?

-------------------------------------------------



well first off 
there's a  flaw 
we need to clear up 

to continue our earlier 
                  analogy

the usa = the globe 

world wide speaking
its all to plain
uncle is more like 
an over grown california 
then 
a true federal authority 

first among nations
        but not
a world government  

 so what we're
talking about here
is  as if california 
tried running 
a  huge state budget deficit
to lift  
the entire national employment level
up closer 
to its  full throttle point 


see folks ?


since 
there ain't 
 no" global"  government
with taxing power

next best iz 

is  the world's economically 
  biggest constituent nation
                       

but  shit
even uncle 
as big balled as he iz
remains  
      a highly 
   imperfect substitute
          for "the real thing"
               
                    a global government  
                    with global 
                        tax and spend  power

to see  just how crimping this is 
 
  one only needs notice
that its only uncle's 
import multiplier 
that is 
            an effective  engine globally

if by increasing
the fed deficit 
one  did not increase imports

the outside world would not benefit 
economically by the policy even one iota

as uncle ups his  fiscal deficit 
its only as that demand increase
 ramifies 
  thru to import increases 
that the globe at large
  grows faster 

and this don't even touch
 distribution uneven-ness 

------------------------------

problem:


as old bob mundell use to say

"the globe's 
a closed system 
so multipliers work perfectly
no leakages  
but guys 
 we are all 
 local taxers 
and so limited 
 by our one state capacities  "

------------------------------------------


but imperfect as it surely iz

whats the deal?



   ok 

 FIRST  WE'll  NEED 
roughly QUANTITATIVE ANSWERS 
   TO SOME QUESTIONS
 
LIKE

      WHATS THE WORLDS ACTUAL GROSS PRODUCT?

(much harder question)
       WHATS THE WORLD'S FULL CAPACITY GROSS PRODUCT ?

   WITH THIS WE GET A CALC 
                OF THE WORLD PRODUCTION GAP

NOW  WE NEED TO KNOW 
  WHAT ADDITIONAL DEMAND 
     IS NEEDED TO CLOSE THE OUT PUT GAP ?
     
SINCE ITS  UNCLE
WHO'S DESIGNATED BIG SPENDER

WHATS THE EFFECT OF 
   UNCLE'S 
 FISCAL DEFICIT INCREASE ON

 HIS IMPORTS  ?

AND WHATS THE EFFECT OF
 UNCLES ADDED IMPORTS
       ON THE REST OF THE WORLDS GROWTH PATH ?

  CAN  UNCLE  BORROW ALL HE NEEDS 
              TO RAISE THE  WORLD  TO FULL OUT PUT ?
--------------------------------------------------------------------
looked at by 
the comparative wealth of nations

is it trickle down economics ?

yes indeed 
and with a vengence 

the richest  nation 
gets to live higher
 cause it indirectly creates
some additional  third world jobs

YES
 OF COURSE 
THE WORLD COULD 
WELL CONSTRUCT ON PAPER

 A FAR FAR FAIRER 
MORE EFFICIENT 
     AND BETTER SET UP

TO REGULATE ITS OUT PUT LEVEL 

 AS AN EXAMPLE
   OLD STIG HAS GUSHED  FOR YEARS 
ABOUT
  A CBers only reserve currency SYSTEM

WITH A GLOBAL CENTER

  that could dole 
out sovereign credits 
to member nations

and of course 
this could well serve
to maintain 
world effective  demand 
at full throttle levels 

but my point is simple

don't imagine uncle's 
deep pockets
sovereign dollar driven
world supplied
           " free ride"

 actually costs 
the rest of the world 
"dollar for dollar" 
in real terms
what they lend him


in fact if anything 
a huge chunk 
  of it 
 comes 
right out of 
the globe's ample 
      "idle hours   budget "

---------------------------------------------------------

by the way 

how you like our control
 of the one world army ?


its budget equals 600 billion too

just whatwe boorrow 
from the 4  aces


yes 
the east asians 
lent us the dollars
to pay  for uncles armada 
and then some 

quid pro quo ?


uncle  secures
 "their" oil supply lines
and 
 robusticates 
their 
export markets 
       

good deal ?

 right ..............


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