-----Original Message----- From: brin-l-boun...@mccmedia.com [mailto:brin-l-boun...@mccmedia.com] On Behalf Of Doug Pensinger Sent: Wednesday, November 03, 2010 9:49 PM To: Killer Bs (David Brin et al) Discussion Subject: Re: Underwater mortgages and the economy
Dan wrote: > Well, the US did prosper from wars it has been in, but that's fairly unique. > Germany didn't, France didn't. The USSR didn't; the Cold War broke them. >Eventually, but they were our supposed equals for the better part of >forty years and one can easily imagine scenarios in which they >continued to prosper in at least some sense of the word. Sure, if they invaded Europe in '79 and Carter wasn't willing to start Armageddon. But, the military was a drain on their GDP, rising to 45% of it at the end. Look at the war surrogate, the race to the moon. They weren't close. I think they grew faster than the US for about 5 years. Planned economies are OK for a while, but tend to get caught up in artificial goals. China has been the exception, but that's because we are in an era of no real disruptive innovations....and China doesn't have to adapt. Why Japan is in a funk now is interesting....socially they couldn't make the obvious decisions. > Finally, as more countries get nuclear weapons, the odds on any real > conflict going nuclear increases. For example, what would happen if Chinese > territorial zones kept expanding and were enforced by China's navy? Would > the US honor treaties, and what would happen then?' >What would happen to our debt to China in the event of such a conflict? We'd probably repudiate it. But, there's a much easier way to handle it. Get the deficit (not national debt) down, and put inflation up at 15%/year. After a decade, we'd owe them zilch. That's one very unique thing about the US debt. We owe dollars. We can, by one statement of the Fed, get rid of the debt. It wouldn't matter if interest rates went up, fixed debt in inflationary times is good for the borrower, not the lender. But, if it got to the point of not paying the debt due to conflict, it would probably get to WWIII. China's nukes aren't that good, so we'd probably only lose LA, NY, Chicago, Houston, Washington, areas. I'd guess we'd get by with less than 50 million killed. But, I'd also guess that would set back the economy a good bit. In general war is profitable to the victor if: 1) The homeland isn't hit. 2) They can make money off the conquered. Traditionally, that's been empire and/or pillaging. The US was different in that it gave money to Europe and then used it as a market for US goods. That's why business taxes were 40% of the Federal budget in the '50s and only a few percent now. In essence, we had foreign consumers pay for our government. Dan M. _______________________________________________ http://box535.bluehost.com/mailman/listinfo/brin-l_mccmedia.com
