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Dylan Phillips
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October 16
Long Term Consequences of Current Account Deficit
Taxes have to go up.
Inflation has to climb, lowering the purchasing power of the borrowed dollars and the real cost of interest payments.
Interest rates have to climb to attract enough money back to the United States to finance economic growth.
The dollar has to fall, so we can pay our debts more cheaply.
We have to sell more assets to overseas investors.
U.S. Workers have to take more wage cuts.
U.S. consumers have to cut back on spending.
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