From: Jerry Levy (Gerald_A_Levy@MSN.COM)
Date: Tue Mar 21 2006 - 08:15:39 EST
Hi Paul C, > To answer with another question: > How many years would it take at the current rate of deficit > for the entire fixed capital stock of the USA to pass into the > hands of overseas investors? I assume you mean 'at the current rate of change'? > Would this point not act as a limit? Why? The issue isn't how long it would take for the fixed capital stock to become fully owned abroad. The issue is, if you are projecting a crash in the long-run, how long is the long-run? Also, I don't see any reason to necessarily believe that foreign ownership of the fixed capital stock in the US would cause a crash in the US. Indeed, a contrary argument could made: if the fixed capital stock becomes fully owned by investors abroad, then those investors have an increased incentive to prop up the US economy -- they have more to lose by a collapse. If firms based out of the US declare bankruptcy in a crash that can't be good for their foreign investors. In solidarity, Jerry
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