The overriding problem is the continuing deficit financing of the federal government.
Politicians hope that deficit financing will be the way to stimulate the economy.
Considering the dollar's2.6% decline in May( trade weighted terms) and the S& P500’ s3.1% drop in the same month, the May TICS report( due in July) should show further declines in net foreign capital flows, which will indicate a widening shortfall of trade deficit financing.
The Maastricht rules in effect prevent deficit financing of state welfare.
