The first presidential debate is Wednesday night. Why mess around? The rich world, of which the U.S. is a part, has been engaged in a monetary Hail Mary that could end very badly.
European leaders are accused of being in denial. But denial is not the problem. Their crisis is unresolved because no resolution exists that the democratic politics of the individual countries will sustain.
In the U.S., a Rubicon has just been crossed in this regard. The Federal Reserve appears to be giving up on the politicians and trying to heal America’s debt wounds the best it can by itself, with a (modest, it hopes) dose of inflation.
Well, ok. The reason I read the rest of this piece, incidentally, was those first three paragraphs. The author appeared to “get it” — the problems in Europe aren’t due to inability to solve them, but lack of political will to (1) tell the truth and (2) put in front of the voters that the choices are either collapse or reform — now.
Then you let them choose. You don’t BS people, you don’t lie, you don’t claim you can find a “balanced” way to deal with the issue, you tell the truth. You lay forward the numbers, you defend them, and you shut up about everything else and demand that anyone who comes forward and calls you a goof (or worse) present their evidence in facts and figures or you simply repeat your point and refuse to engage on any other set of terms.
This is what Perot did and it works.
Such fabulizing aside, there is no political market in America today for austerity, which Mr. Romney isn’t selling. We face a fiscal cliff precisely because the natural meeting point of Democrats and Republicans last time was no spending cuts and no tax hikes.
No, we face a fiscal cliff because we spent 30 years lying to people.
This is the only difference between the U.S. and Spain. Talk about austerity: Imagine if Mr. Obama had to come up with $1 trillion in spending cuts and tax hikes overnight because the Fed and Red China stopped buying our bonds.
But the global Hail Mary will end badly if the aging, indebted welfare societies of the rich world, including the U.S., don’t get growing soon. Let’s hope, between contraception policy and Mr. Romney’s tax returns, the candidates find a moment to convey to voters what this election is really about.
Ah, here we go. The big lie embedded in the article’s premise.
And The Journal knows better, which makes this particularly inexcusable.
Look at that chart. That may not be quite as easy to understand, so let’s put it in better terms understanding something that is very basic about debt — nobody takes it on without immediately spending it, which means that each dollar of debt will result in one dollar of GDP.
We therefore must subtract each dollar of debt from alleged expansion of GDP to determine what the actual growth rate in the economy (that is, from organic expansion of demand) is.
So let’s look at what that is on a quarterly basis:
What growth? There hasn’t been any on an organic basis for 30 years!
This is the scam folks, and until we cut this crap out and start talking about it, and what we’re going to do about it, there is no resolution — or forward economic progress in real terms — that is possible.