Alex Singleton uses the Anniversary of the repeal of the Corn Laws to praise Richard Cobden with the traditional litany of British history. The four Comments to the Piece rouses a Cheer for the northern business leadership above Watford Gap, Thomas Babington Macaulay for the Reform Bill, Sir Robert Peel’s actual repeal of the Corn Laws but with their failure until Imports from America could supplement the diet, and the lack of Trade model which existed at the time of the Repeal. No one mentions that it was a Victory of the Industrialists, who wanted cheap labor which could only be bought with cheap food. The whole Collection can trace the conflictive nature of British history still resonating Today, while also ignoring foreign response which reproached Britain until the 1890s for their restrictive Trade policy. The British possess the irritating habit of self-praise of the Nonexistent, while turning a blind eye to the necessary Resources of foreign nations and Colonies underpinning the natural rise in economic power, both in Britain and elsewhere.
Blind honors for Trade must have a Counterpoint, so I will provide this Post, which criticizes the proposed loan of $100 bn to the IMF. Peter Orszag, head of the OMB, says there is no chance that the loan will not be repaid, so that the loan should be scored at ‘$0' for the purposes of the federal budget. The CBO says there is a 5% chance of default on the loan. I say that the IMF loan will have as much chance of repayment as the US Treasury Debt, where Surpluses under Carter were quickly canceled by Bush and Congress. The entire issue, though, misses on the point of Trade, where the halcyon swap of Goods and Services under the financial buoyancy of Credit Default Swaps will never again come. Honest finance is missing everywhere in the World, and could never reach the high goal of financing such levels of Trade. Corruption of federal lending practice will never make a difference in the financial alignment, and We will need the funds elsewhere eventually. Be sure to read the Comments here again, as all three Respondents present a frame for the loan. I would state myself that modern economic policy always advocates rolling debt over rather than it’s repayment, whether Silent or Vocal, and We should worry about Collateral structure even in this great Country of Ours.
I will finish this Post with reference to the article by John Quiggin. It is centered on Australia rather than the United States, a good reference because it is a wealthy land, but one where the American belief in unlimited Credit is not present. Keynesian theory is again raising up to replace Monetary policy; the trouble comes my lack of faith in both. Each establishes a huge Reservoir of Debt–whether Public or Private–and neither has actually shown a physical value to match the loss of an average 8% of GDP in finance charges to non-Participants in the Production process. I could almost advocate a mandatory $5000 Bond must be filed with the FDIC in Cash, before any mortgage is granted; sums collected to pay for the potential losses incurred from default on such Notes–whether Commercial or Personal. Government debt is something else, and I might advocate a ‘Clawback’ procedure of federal Employee salaries, if they were involved in the decision-making process leading to under-projections of the budgeting process. It might seem far-fetched, but far better than witnessing Mobs attacking Tax Collectors. lgl
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