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International credit terrorism.  A recent NPR report on the decline of the US dollar against the euro, the yen, and the Canadian dollar brought out this interesting answer to a simple question on what the US Treasury does with foreign investment. The interlocutor in the center of this is Mark Zandi, chief economist for Economy.com, a consulting firm, and he has just finished telling NPR that foreign investment fuels growth in US Treasury securities, corporate stocks and bonds, and other market commodities (basically anything for sale in the US). What does the US Treasury do with foreign investment? Here's Zandi's answer:

The US Treasury uses investment from abroad to finance the federal deficit—which, in the fiscal year ending Sept. 30, was $413 billion. Much of that deficit is a result of the Bush administration's tax cuts, and spending associated with homeland security and US military operations in Iraq and Afghanistan.

"In a very real way, foreign investment has been used to finance our national security activities abroad and at home," Zandi says.

The curiosity here is that the American economy needs foreign investment in order to continue fueling its government's aggressive defense and security activities abroad. The irony here is that our economic situation forces us to "submit America's security to an international test" within the global marketplace.[1] It seems to me than any MBA from Harvard could tell you this would happen. For that matter, anyone who's had to balance a checkbook or struggled with the constricting pressures of credit could tell that this would happen, even within the fantasy world of supply-side economists.

1. Oh, but the irony is really painful. See my earlier blog on Bush's remark "I will never submit America's security to an international test," then leveled against challenger John Kerry. It's more painful in light of Osama Bin Laden's bold declaration that his goal is to bankrupt the US via relentless terrorism. See CNN, November 1, 2004.

Since 2005 is only a month away, it's time to think about ordering the new Friends Calendar from the Tract Association of Friends.  I mean, hey, it's only a $1.50. They also have a cool pocket version of the calendar for 50 cents less. The order form (listing the calendars and all of their books, pamphlets, and tracts) is available here. This is another good way to support the work of your Christian Friends.