On the other, it faces having to cut dividends and borrow more to buy its way out of trouble.

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Official publications praised the "happiness and hope" brought by a recent stock rally, and Beijing has cut trading taxes and increased the amount brokerages can borrow as ways to boost stock prices.

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It cut the rate to 5.75% and urged banks to borrow from the window, a previously taboo measure.

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Then they could borrow only at interest rates that reflect their true riskiness, forcing them to cut lending.

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Meanwhile the government's ability to borrow money was dealt a blow last week when Moody's, a ratings agency, cut Slovenia's bonds to "junk" status.

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What many forget is that it was during the Reagan years that we went from being a creditor nation to a debtor nation as President Reagan was required to borrow heavily in order to make up for the income shortfall that resulted from so massive a tax cut.

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In principle, the US government could print up or borrow a ton of money, hand it to state governments, and then have all the money used to cut taxes rather than to finance programs.

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