8/2     Someone posted a few days ago: "Too bad 58% of the people don't know
        that the economy would collapse if the deficit was zero."  I happen to
        be among the 58%.  Can you please elaborate?  Thx.
        \_ The trade deficit or the budget deficit?
           \_ I think it was the budget deficit.
              \_ I think the OP of the quote meant the debt and not the
                 deficit. If it was the deficit then OP is truly ignorant
                 because there have been budget surpluses in the past.
                 However, there has always been a national debt. If we
                 were to pay off that debt (which stands at $7 Trillion
                 currently) there may be certain financial repercussions
                 that economists aren't sure about. Greenspan commented
                 on this briefly a couple years ago when there was overly
                 optimistic talks about paying off the national debt
                 within our lifetimes based on extrapolating from the
                 surpluses we were getting from dot-com mania.
        \_ Someone's an idiot?
        \_ I seem to remember some discussion of financial chaos if the US
           government bond market disappeared.
           \_ US Bond market stops selling, Asian investors (and governments)
              stop buying.  They stop buying, they stop selling their own
              currencies to buy dollars.  That happens, the dollar starts to
              deppreciate VS. the Yen and Yuan.  That happens, and asian goods
              becmore more expensive in the US, then asian exports start to
              decline, which is a big part of their economy.
              \_ US governemnt bond is the classic risk-free investment, and
                 some people like to invest in them.  Also, aren't lots of
                 things tied to the price of a t-bill?
                 \_ Even if the government wasn't selling bonds, there'd still
                    be a t-bill market.  The thing is prices would go up while
                    interest rates would go down.
              \_ yea, but asia is becoming a big market itself, and asian
                 domestic consumption is rising fast in relative importance.
                 japan's economy was pulled out of its 10-year recession by
                 by china, for instance.
        \_ Are there notable economies that regularly run a budgetary surplus?
           Probably some of the oil states, Norway for example.
        \_ China does not seem to have a trade deficit, and it's economy
           does not seem to be collapsing. We had a budget surplus a few
           years back and the economy was doing hell a lot better than it is
           today.
           \_ Historically, we run a budgetary deficiet, and budgetary
              surpluses are by far the exception.  And when we were running
              the surplus, there was confusion among some financial people
              re US governement bond market.
        \_ Those who spread these kind of lies are republicans profiting from
           the war, the oil, and everything else at the expense of the middle
           class.
        \_ We need partha for the definitive answer.
        \_ The way I see it, it is similar to managing a household.
           If you manage your household, then you will try not to run
           into budget deficit, because you know if you borrow money,
           you have to pay it back with interest. Now why does the
           government runs a budget deficit most of the time? It's
           simple, because those who spend the money are not
           responsible for paying it back. Think about it this way, if
           your household will be run by someone else 4 years later,
           you might not hesitate to overspend, especially buying
           expensive stuff from a store you own down the street. Most
           households are more responsible about money because they
           have to pay back whatever they spent. The government does
           not. It depends on how corrupt they are. The democrats want
           to spend the money on public infrastructure, on job
           creation, on welfare (not everything I agree with). The
           republican wants to spend money on defense (the big surplus
           we had, geez, what can we do with all these money, how do I
           get it into my pockets), and for that, they need to create
           enemies and wage wars around the world.
           \_ spending billions on missile defense systems that don't work
              isn't defense, it's welfare.
              \_ Don't forget other corporate welfare like crop subsidies,
                 ethanol programs, and tax cuts for 'job training' that
                 amounts to operating the cash register at Walmart.
                 \_ I figured I'd just post the most obviously fraudulent...
                    Now watch as the motd neocons try to explain to us why
                    deploying a system which was shown not to work
                    makes sense, even without further testing.
           \_ Republicans also 'spend' surplusses by giving tax cuts, then
              scream bloody murder when you try to raise taxes to cover the
              defecit.
        \_ BTW, what was the last time the national debt was 0?
        \_ I am so happy no one is using such facts to lobby for deficits.