So Obama is flirting with a future budget crisis. Moody's emphasizes two warning signs: rising debt and loss of confidence that government will deal with it. Obama fulfills both. The parallels with the recent financial crisis are striking. Bankers and rating agencies engaged in wishful thinking to rationalize self-interest. Obama does the same. No one can tell when or whether a crisis will come. There is no magic tipping point. But Obama is raising the chances.--------------------------------------------
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Obama will save us by using the executive skills honed during his oversight of the Chicago Annenberg Challenge....oh, wait a minute....never mind.
ReplyDeleteWilliam, for the first time in my life, since obtaining my Economics degree, I find myself taking a very keen interest in these developments.
ReplyDeleteI lived through the stagflation of the 1970s. It meant that I could not find work in my chosen field. The openings were simply not available.
I find that whatever happens in the USA is often echoed in Australia, and this is yet another reason for my intense interest at this time.
I have been expecting this crisis ever since Dr. Utopia took on the position of POTUS. He has made some terrible decisions, including the Porkulus that is allegedly a stimulus.
The policy prescriptions were always wrong, because Keynesian style economics is not the answer to the problem. The expansion of the economy as we have witnessed can only lead to further pressures that will create a world wide Depression, although I do think that Depression is still too strong a term to explain the economic downturn, it will not be too strong when the impact of Dr. Utopia policies are truly felt.
I have begun writing on the subject at this location:
http://australianstagflation.wordpress.com/
I am actually looking at a world-wide situation, but I am also tying my thoughts back to the 1970s because that is when we first experienced stagflation and when we first recognized that following the recommendations of John Maynard Keynes would not always bring about the desired result, because in given situations those policies were the wrong prescription.
The U.S.A. budget crisis is not something that is inevitable because of the out of control spending habits of this POTUS and Congress.