Vice President Kamala Harris finally had her first interview for the position of POTUS and brought her sidekick for vice president, Gov. Tim Walz, to hold her hand in case she stumbled into a word salad.
There is no question in my mind that the annual federal deficit ($1-2 Trillion per year) and the accumulated debt ($34 Trillion and going up), not to mention the hidden debt of printing money and making future promises, will cause a financial crisis at some point. The problem is that we have yet to experience negative repercussions from all this largesse, aside from some inflation which appears to be abating.
Constant stimulus creates a new normal, which is inflationary and pro-growth. That is, until the stimulus ends. And then we might be looking at an economic depression because, some day, some how, this money must be repaid. We have had 15 or 20 years of yearly stimulus and should expect 15-20 years of economic contraction (if we are lucky).
The alternative is to disavow the public debt, which has been unthinkable and would probably cause us to lose our "reserve currency" status. And then we will be like Greece, but without an EU to bail us out.
If we try for a "soft landing," it would probably result in a Japanese-type economy which was decades of no growth and deflation.
This seemingly inevitable reckoning will evidently catch all modern economists by complete surprise. And that includes both sides of our political spectrum.
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There is no question in my mind that the annual federal deficit ($1-2 Trillion per year) and the accumulated debt ($34 Trillion and going up), not to mention the hidden debt of printing money and making future promises, will cause a financial crisis at some point. The problem is that we have yet to experience negative repercussions from all this largesse, aside from some inflation which appears to be abating.
Constant stimulus creates a new normal, which is inflationary and pro-growth. That is, until the stimulus ends. And then we might be looking at an economic depression because, some day, some how, this money must be repaid. We have had 15 or 20 years of yearly stimulus and should expect 15-20 years of economic contraction (if we are lucky).
The alternative is to disavow the public debt, which has been unthinkable and would probably cause us to lose our "reserve currency" status. And then we will be like Greece, but without an EU to bail us out.
If we try for a "soft landing," it would probably result in a Japanese-type economy which was decades of no growth and deflation.
This seemingly inevitable reckoning will evidently catch all modern economists by complete surprise. And that includes both sides of our political spectrum.
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Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.