No one, no one has connected the overspending and borrowing by the US government as the cause of this credit mess. No one is saying because everyone is hoping that they will spend more.
It’s consumers borrowing too much. Sure. Over leveraged banks. Ok. All this means a recession, a writedown of debt.
I hear everywhere governments are going to save the day by borrowing more money. Congress is about to spread a bunch of cash again to get things going. Bernacke talks of printing money. Canadian fed is talking deficit financing again.
This is madness. Government has been growing faster than the economy in western nations. That is an accomplishment since the economy has been growing very fast over the last years.
Where is the money going to come from? Oil rich nations who are losing production capability and facing dropping oil prices? China who is going to have hundreds of millions of unemployed people roaming the streets? Europe who now owns all their own banks and are facing pension and entitlement obligations that are over the top? Commodities producing nations that have seen prices drop by half year over year.
Maybe start printing money.
I suggest a run on wheelbarrows. We’ll need them to haul our paychecks to the grocery store.
I said to my employer this morning that this stuff won’t end until all the stupid people who created the mess are either hung, kicked out of government, or driven to beg on the streets. Since that won’t happen for a long while, it is going to be long and hard.
Oh, someone really bright said that equity to profit ratios were showing exceptional deals this morning. Hey buddy, those profit numbers were the last few quarters.
I wonder if anyone has a ‘computer model’ that shows what happens when the world economy shrinks by 15% in a year?
This election is between giving power to a leftist with a penchant to handling very large cheques to very dodgy supporters, along with a congress that essentially created this disaster, and an old guy who doesn’t understand economics.
Wretchard makes a good point above. There is now a ‘flight to safety’, people buying, pause for effect, US dollars. As bad as the US mess is, it’s nothing compared to the absolute disaster in Asia and Europe.
Maybe the only rational thing for the US to do is pull back, arm the nukes, have a very public show of a big red button saying anyone twitches they are gone, pull back law enforcement, then start naming names and addresses of the idiots in the economic and political class that created this mess, and watch the second amendment really work.
Derek
