WSJ on wealth

Seth Ackerman SAckerman at
Thu Jan 20 13:52:46 PST 2000

Brad DeLong wrote:

> As long as the U.S. foreign debt is denominated in dollars, I ain't
> worried...

You seem to be saying that as long as our foreign debt is in dollars, we can always pay down our debt by printing more dollars. But couldn't that just scare investors even more, causing them to shift their money into euros? And couldn't it effectively spell an end to the era when America could habitually run big, chronic external deficits?

And if America couldn't run big, chronic deficits anymore, how would the world economy keep growing? After all, didn't U.S. imports represent something like half of 1998's world GDP growth? Those imports were financed by foreign borrowing, right?


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