Of course the government doesn't need the Chinese or anybody else to “finance” it, but that's another story.

Of course the government doesn't need the Chinese or anybody else to “finance” it, but that's another story.

My own interpretation of the thrust of Krugman's remarks in his article is that he is attempting to provide two things for the Obama administration: 1) An intellectual underpinning for the plea Obama has made openly for the Chinese to save less of America's money and buy more of what America produces with the exchange they generate from their export trade with the U.S., and 2. A scapegoat to hold accountable when the inevitable — forgive me but I've got to believe even Krugman knows the real trouble we're in because of our debt — economic consequences of nightmarish deficit spending will be driven home to an American public who will look to Washington first when they assign blame.

I read the text of a speech Obama gave at about the time of the Pittsburgh summit in which he showed the very finest of coffee klatsch discourse in outlining the future direction of a new world economy in which the U.S. would learn to save as Asian consumption would rise in turn and, by an implied conclusion which only seemed to sit there without being stated, an eventual balance within the world economy would be achieved. What vision! The ability to see the future writ large in economic mega-trends and to communicate that understanding in such statesmanlike fashion. But the unavoidable conclusion is still that it will all work out once someone else gets their house in order. There was almost no mention of the need to address our own fiscal shortcomings.

So here the U.S. is standing in front of the Chinese with our hats in our hands hoping they will continue to finance our runaway spending while simultaneously preparing to hold them accountable for the social outcomes we create ourselves. That is the logic I see in Krugman's article.

I'll be back Don. Don't stop.

My own interpretation of the thrust of Krugman's remarks in his article is that he is attempting to provide two things for the Obama administration: 1) An intellectual underpinning for the plea Obama has made openly for the Chinese to save less of America's money and buy more of what America produces with the exchange they generate from their export trade with the U.S., and 2. A scapegoat to hold accountable when the inevitable — forgive me but I've got to believe even Krugman knows the real trouble we're in because of our debt — economic consequences of nightmarish deficit spending will be driven home to an American public who will look to Washington first when they assign blame.

I read the text of a speech Obama gave at about the time of the Pittsburgh summit in which he showed the very finest of coffee klatsch discourse in outlining the future direction of a new world economy in which the U.S. would learn to save as Asian consumption would rise in turn and, by an implied conclusion which only seemed to sit there without being stated, an eventual balance within the world economy would be achieved. What vision! The ability to see the future writ large in economic mega-trends and to communicate that understanding in such statesmanlike fashion. But the unavoidable conclusion is still that it will all work out once someone else gets their house in order. There was almost no mention of the need to address our own fiscal shortcomings.

So here the U.S. is standing in front of the Chinese with our hats in our hands hoping they will continue to finance our runaway spending while simultaneously preparing to hold them accountable for the social outcomes we create ourselves. That is the logic I see in Krugman's article.

I'll be back Don. Don't stop.

Thus the government doesn't need to sell any treasuries, in order to spend.

As far as the Chinese currency I agree with Don.
Keeping the yuan pegged to the dollar is identical to China using the dollar as their currency. If that makes them artificially competitive, why not accuse, let's say, New Jersey of the same thing?

And as usual, Kurgman left just enough wiggle room to cry out “Out of context” when someone calls him on his BS.

And as usual, Kurgman left just enough wiggle room to cry out “Out of context” when someone calls him on his BS.