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2003/11/1-2 [Politics/Domestic] UID:10899 Activity:nil |
11/1 I understand how a US trade deficit translates to a downward pressure on the US dollar, but does a big US budget defict also put downward pressure on the dollar? How? \_ budget deficit solution is usually issuing bonds. A strong supply of US-currency based-bonds means we would have to work extra hard later to pay that debts. Pretty much like what happens to companies which sells bonds to stay alive - their stocks tank. The Federal government has an obligation to pay interest first before spending on the citizens. |
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