Economy is such a vast subject, you need to open a million windows to peak into it. The discussion that follows opens only one such window, doing it to shed light on a subject that blazed furiously not long ago. Here is that story:
An accountant, an economist and a military general teamed
up to tell America it is in danger. They are David M. Walker, Barry M. Poulson
and Bill Owens who cowrote an article under the title, “Debt: The greatest
threat to America’s national security,” and the subtitle: “The US must remain
a republic and representative democracy, not direct democracy.” The article was
published on November 18, 2022 in the Washington Times.
Here, in condensed form, is how the three authors have described
America’s troubles:
“The federal government has increased its spending and has financed it
by borrowing. Total federal debt as a share of GDP has more than doubled, from
55% in 2000 to 122%, and is projected to increase to almost 200% by midcentury.
The US has emerged as one of the most heavily indebted nations in the world.
Interest rates on US debt have increased sharply, and lending nations have
curbed their appetite to lend. Some nations are also working to reduce reliance
on the dollar as a reserve currency. We are now experiencing stagflation with a
debt burden comparable to that incurred during World War II. Congress has
abandoned fiscal responsibility, and we can no longer rely on elected officials
to restore fiscal sanity and sustainability. The budget process is broken. The
debt ceiling has failed, and other statutory fiscal rules have not stood the
test of time”.
The authors are obviously patriotic Americans worried about the state of
the country they care much about. In fact, after describing America’s
difficulties, they proceeded to tell how other nations, facing similar problems,
went about fixing them. And so, they urged America to adopt similar measures to
save the country before it is too late.
It also happened that while the Americans worried about
their country’s debt, other people — mostly non-Egyptians — worried about
Egypt’s debt, or more likely pretended to worry. They latched on to the opportunity
which opened to them by the fact that Egypt hosted the COP27 international event,
and proceeded to express the dishonest views that were inculcated into them about
the country and its economy.
Checking the internet, using any word you might think
will yield a story about Egypt, will return tons of articles on the country
and/or its economy. Check the content of these articles, and you’ll form an
image of what must have happened during all the time that COP27 was held in that
country. Here is what you’ll most probably see with your mind’s eye:
An army of moral prostitutes, awaken by the bloodsucking
worldwide criminal syndicate, receives the order to spread out and visit every
nook and cranny on the planet that’s putting out skunk-like stinky lies that exceed
in size any biblical myth you may have heard about lately or did so as a child.
Obeying those commands, the prostitutes go around the
world and visit every gutter, septic tank, sewer, drain, trough, cesspool,
culvert and what have you. They collect enough filth from each hole to fill
buckets of the stinky stuff – something they do in multiple languages,
especially Hebrew and Yiddish. They slap the Star of David on the buckets, and
throw them at Egypt to distort the reality that the country is fast becoming the
shinning city on the hill, a development that frightens the bloodsuckers whose
existence depends on keeping the Middle East in a permanent state of backwardness.
But what is the undeniable reality concerning Egypt and
its economy? To begin with, Egypt’s population is much younger than that of the
United States, and expected to grow in size for at least another generation
given its current high rate of birth. This alone says that Egypt—unlike America
whose population is stable or shrinking—will have the necessary ingredient in
terms of manpower to produce the wealth that will pay off the debt the country
is incurring.
Another undeniable reality is that despite the worldwide
troubles of supply chain disruptions, as well as the COVID pandemic, the
Eurasian war and inflation, the Egyptian economy has bucked the trend of
stagnation and shrinkage, and has instead grown — at times even substantially. So,
what happens to an economy that borrows from external sources while growing
internally at the rate of 5 or 6 percent? It happens that every 100 dollars
that Egypt borrows, become 105 or 106 dollars at the end of the year. This
gives the country the ability to pay back the 100-dollar loan, and retain the 5
or 6 dollars it earned by the labor of its workforce.
But most of the time, Egypt did not even borrow the
money. Because the country was doing extremely well before the supply chain
disruptions, COVID, the Eurasian war and inflation – quick buck artists, loaded
with hot money, were attracted to it. They fattened their wallets in good times,
and when the troubles hit the world economies, they pulled their money out of
Egypt and ran away.
While this may have shaken the confidence of genuine
investors, it did little or nothing to affect the ability of the economy to
maintain the level of wealth it was producing. Thus, contrary to popular
belief, Egypt did not need to borrow and replenish what was withdrawn by those
artists. It only asked its friends to deposit their idle money in Egypt’s
Central Bank to reassure the genuine investors that if worse comes to worse,
Egypt will be allowed to use the deposits to dampen what may roil it if this
were to happen unexpectedly. It is as if Egypt were handed a premium-free
insurance policy with no obligation attached, and no expectation that it will
be needed.
Contrast that state of affairs with the American Federal
Reserve (Fed) which—to check inflation—raised the interest rates on all sectors
of the economy. In so doing, the Fed also gave the foreign lenders an
unexpected chance to fatten their wallets at the expense of an economy that’s
reeling with the knowledge that the future will not be a cakewalk.