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Hannity is protecting Palin because he is a shrill for the Republican party. BTW, I happen to like quite a
bit about Palin thus far but would like to see a tougher interview. Oh!
That was Gibson, right? The same Gibson who did not accurately define the Bush doctrine (which, BTW, can be likened to JFK's inaugural speech).

Forget about any of the radio talk show hosts delving into the nuances of the financial markets or basic economics. They skim for their own bias and run with it. Also, they are prone to misstate or eliminate facts altogether.

I think there is room on the radio for someone who can help educate people and take out the political noise. Bob Brinker makes an attempt but he's mostly about investing.

How's your radio voice, Steve?

Beck has been pushing this message for almost a year now, so it's hardly surprising that given the events of the last week that he'd push it even harder.

Beck is one of the few radio hosts who is willing to listen to differing viewpoints and to listen to them, especially if the person can back up what they say.

I'm sure he'd be willing to have you on the show if you contacted him and supplied your credentials.

Like Bob asked, how's your radio voice, Steve?

that was supposed to be "listen to differing viewpoints and to learn from them"

Thank you so much for having a look at this, Steve. I agree, Glenn is usually good about listening to and learning from others, which is why this concerned me. I too think it would be a great idea for you to speak with him, to at least blunt the doomsday edge he seems to be so recklessly pushing. I generally like the guy, but he seems too willing to jump onto sensational "the world is ending" stories, especially recently.

We should also keep in mind that 3-4% growth with an economy at almost $15T is very different than 8-10% growth with an economy at $1T (ie India, which is of course a very large economy relatively speaking).

Thomas Barnett (http://www.thomaspmbarnett.com/weblog/)
thinks along these lines as well and argues convincingly that security is our number one export and is not quantifiable either.

Wondering what you think about the $700B MBS bailout. Depending on how much of that translates into deficit, that could mean a 5% bump in the national debt with the stroke of a pen. Any risk that the substantial international owners of US treasuries get skittish when we flood the market like that? How bad do things need to get before they start to lose confidence in us?

Hi Steve, I just want to say first that I appreciate this website because even though I disagree with certain assessments, you present an excellent explanation of how money and T-bonds work in the economy... which is not an easy thing.

So to my disagreements, I wanted your take on a few things... I'll do this by answering the questions to Glenn Beck.

Question 1 - Yes
Question 2 - Yes
Question 3 - No, a detailed explanation is necessary to show that growth won't solve this issue.
Question 4 - I'll do one up to 2040, which is where I gather they get the $53 trillion deficit number from.

Current GDP (PPP): $13.78 trillion
Growth rate (rgr): 2%
Total Revenues: $2.568 trillion
(as of 2007)

Using a simple compound interest calculation, assuming a constant rate of growth in GDP up to 2040:

Future GDP (PPP): $26.12 trillion
(Predicted 2040)

Assuming that the ratio of revenues to GDP is constant, the revenues for that year would be:

Future Revenues: $4.86 trillion
(Predicted 2040)

By the same measure, the expected expenditures would be:

Future Expenditures: $5.17 trillion
(Predicted 2040)

Now, assuming the $53 trillion deficit does not increase up to 2040 (ignoring that it would according to above), the ratio of debt/GDP would be 202.9%

Of course this is an understatement because clearly there would be an increase to the deficit as the expenditures exceed revenues.

Question 5 - Yes I would buy that, but the problem is that you can sustain economic growth to that kind of level until the baby boomer generation dies off... there are three problems with this:

1) Target GDP for a debt/GDP ratio is $88.3 trillion, which means that the GDP real growth rate needs to be no less than about 5.9% over 32 years... I don't know how likely that is, but given that it's 2% now and not likely to increase due to the mortgage crisis, I wouldn't hold my breath on that happening.

2) Continued devaluation of the dollar due to excess liquidity in the market... or in other words, continued rise in inflation due to the continued run of the printing presses by the Federal Reserve. I absolutely agree with one of your articles which said that defending the dollar is the most critical thing... if that goes down, everyone goes down. But the continued deficit spending, which involves printing money/T-bond deal, is only going to have the dollar tank further than what it is already. Just look at what's happened over the past 8 years.

3) I'm not factoring in interest repayments.. which would be huge. The point that David Walker is making is that by 2040, we'll only have enough revenue to pay for some entitlements and their respective interest... that's it. Unless of course, you print more money/T-bonds deal and drive the deficit up higher... but by that time, the dollar is going to be in a sorry state.

Ok... so feel free to take this analysis apart. This isn't my area of expertise, so I'm open to being wrong.



Couple of post-read errors and sources:

Question 5 - "...that you CAN'T sustain economic growth..."


CIA Factbook

I should really proof-read...

"... 1) Target GDP for a debt/GDP ratio of 60% is $88.3 trillion...

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