The Film Industry in New Mexico works on interest free loans as long as guide lines are met relating to expenditure of the funds back into the states economy. A factor of many times more than the loan is the result of this re-circulating of cash. The free world economy works in much the same way.
I can't find it right now, but I had a Wall Street Journal graph and article, a while back, that showed the USA 'Debt to Earnings' ratio, similar to when you and I, as citizens in the USA, buy a house or car. (the rest of the world it appears, has no such system, thus has no idea what in the world we are talking about)
The graph showed the USA debt structure and compared it to the GDP. (Gross Domestic Product) We are among the lowest ratios in the world. Much lower. Thats a good thing. Much better than the other developed/developing countries.
Large companies borrow to build their business for tomorrows demand of their product.
The USA is a free country much like a huge world business. China and India and all of the European countries are in the range of 'big' debtor nations, percentagewise much more in debt than the USA. Most times the debt shows up as very good for the GDP's performance in a free country like the USA. It shows we are investing in the future.
Our GDP is the highest in the world by far. NO nation in the world even comes close. A Billion dollars is a drop in the bucket. (Now for you and I, it looks gargantuan) The cost of the war in Iraq is surprisingly, the same dollar amount of our own consumption of 'salty snacks' in the USA. sort of puts things back into perspective now doesn't it. (the Wall Street Journal)
The graph was for the last ten years back from 2005. As the debt fell, the GDP 'fell' likewise. It was an interesting article. Raising taxes actually 'depressed' the GDP in the same way, causing less tax revenue to be generated. (a graveyard spiral) Luckily, people that are much more knowledgeable than us, keep track of such things.
The Oil exporting nations, like UAR, Saudia Arabia, Dubai, Kuwait, Iran are awash in cash but do little for the modernization of their countries. The North Sea Oil has helped Great Britain as well as the Scandinavian countries but nowhere near making them rich.
Russia has been nationalizing the Oil industry as Communist nations are prone to do. It will eventually fall into an environmental disaster like it was before the 'temporary' fall of Communism. Putin is smart enough to 'commision' the Oil companies that rebuilt their Oil industry, to run it.....for now.
The Oligarchs (sp) are back in power again. Putin and 'they' run the nation.
The head of 'YUKOS' Oil was imprisoned and friends of Putins divided up the wealth he controlled. Lately, Putin and his 'Band of Merry Men', have been slowly nationalising the worlds other oil interests in the former Soviet Union. Russia's Putin, also wields the energy resource much as he would a weapon.
Hugo Chavez is another fun bedtime story. Venuezuela has gone through boom bust cycles that lead to revolt and military coups from time to time. The falling price of world oil may cause another economic disaster like it did for them in the 80's. They are really strung out in debt, and Oil is their only 'cash crop'. They, like a communist country does, 'nationalized' their Oil industry. Lately Hugo has said that the rest of the privately held interests in Nicaragua are in his sights. Communism works, oh yeah! history has shown that. (choke, gag, cough) It will take a while, but it too will turn to Kaa, Kaa. Remember, 'killing the Goose that laid the Golden Eggs'? Has anyone else noticed how much Hugo looks like Mussolini? Remember the guy, read 'Dictator', that destroyed the Italian nation by an aliance with Hitler during the second world war? The same guy that was hung by his heels after being killed a little at a time by his own citizens along with his mistress? Amadadinejad from Iran just paid a visit to his new best friend Hugo. A new Kalishnikov (think AK-47)factory is already on Hugo's table. (that will control the 40% of his population that thinks he is not to be trusted) along with some MIGS (for USAF target practice?) I see a repeat of history already. Doesn't Hugo know that Cindy Sheehan, one of his latest squeeze types? is in favor of gun control? Oh I forgot she meant only the guns in the USA.
The USA is lucky to not depend on, as an only resource, volatile 'Oil'. As it stands we only produce about 28% of our own needs. We are a big importer of OIl. The warm weather in the East has resulted in lower consumption so it affects the world price, as well as our 'trade deficit'. (Makes it lower as well) Watch for the opening of the new much wider 'Panama Canal' to have a drastic effect on the world price of Oil. Saudi Arabia is ramping up production as well. They are already the supplier of one fourth of the worlds consumption. The decreased price will also have an effect on the amount of cash available to support terrorism as well...maybe?
The reduced energy costs and resultant increased profits, due to reduced expenditures across the board, raises the USA's total tax revenue, thus decreasing the national debt. (not to be confused with 'the trade deficit') The Wall Street Journal does a much better job of explaining it than I do. In other words, 'All is well in the USA', not perfect of course, but nothing in this world is. So long as no one upsets the 'Apple Cart'...."What..in todays world, is 'an apple cart'?"
The National Debt. It sounds like a four letter word when used by our 'mass media' during an administration that does not conform to their own 'personal' desires. Yes the 'media' is comprised of people like you and I, shocking isn't it.
The US Dollar is our standard of exchange, most all of the world holds it in high esteem as well, due to it's unequaled stability. The 'Debt' is nothing more than a 'loan'. Bond holders like Banks, Corporations, foriegn Nations even lowly Blogengeezer holds bonds. They earn 'Interest' (profit) and it is a 'Hedge' against inflation. It is a savings account for many.
When the dollar is 'High', things that are imported, 'Tourism' for one, are very costly to visitors using their undervalued currency. They tend to stay away and spend their 'Pesos' elsewhere, unless they are wealthy, the wealthy live 'well' everywhere. (thats why they are called 'wealthy')
Norway will get you a ride from the Airport to downtown Oslo in a cab for $95 in US currency. Oviously the 'Krone' is very 'High' against the Dollar due to Norway being one of the North Sea Oil exporting Nations as mentioned earlier. A hotdog at an 'Ethnic', (think anyone not Native Norwegian) cafe stand, will set you back $2.30, not bad unless you compare it to a 'Spicy Chicken Sandwich' at McDonalds in the USA, for a $1. 'Geezer Coffee' is only 50 cents. Right now, Burger King has a 'Sausage Biscuit and Coffee' for about 75 cents. That would not buy you the napkin in Oslo Norway. Things 'made in Norway' are way too expensive for anyone except the wealthy. Norwegians love stuff made in Asia, it's relatively cheap.
Well guess what happens now? The people from other countries, like Norway, that want to tour the USA can do it cheaper than staying home. We are a 'Bargain' to them. As long as the Dollar is low in relation to other 'Higher' currencies, we can sell them our 'goods'. So see the 'weak' dollar is not all that bad. Where it does hurt is when we 'just have to have' things (think of all the latest electronic gizmos our 'Poor' kids have to own), from other countries that have higher currencies. This eventually (don't hold your breath) tends to make us forego the 'foriegn goods', which helps to reduce our "TRADE DEFICIT" Voila! I don't see that happening anytime soon, because we American people love 'Stuff'.
Now that I have made 'Blogengeezer Economics One' so simple, the world will all even out some day. The John Nash (A Beautiful Mind) 'Theory of Equilibrium' in action. Go For It! Don't 'Sweat' the Petty Things and Don't 'Pet' the Sweaty Things.