Posted on 11/11/2009 7:33:05 PM PST by SeekAndFind
“Dem and GOP will not do that and risk losing re election.. . . His [Bernake’s] conclusion is that the Japanese approach (print money and prop up the banks/insurance companies) is the only politically viable option left.”
This is the nub of the issue and neither political party will do what has to be done. Their idea of a good economic policy is to try to keep things going as they are until they are out of office. Then someone else takes the blame.
Ultimately, Mr. Market will foil that strategy at an arbitrary time. A market crash will come and whoever is in power at the time will get the blame. In reality, our entire government since Reagan has been inflating assets like crazy and they are all to blame.
We may ultimately owe Obama a debt of thanks for making so obvious what the cause of the problem is. A trillion dollars a year added onto a deficit brings things to a head sooner and with an obvious statist in office. He just takes the approach of his predecessors since Bush I to their logical conclusion. A crash on his watch might move people’s hearts to a more freedom-based solutions in the future. But crashes and the following chaos will be very unpredictable and could go very wrong in this regard.
Don’t get me wrong. The prospect of a crash is very scary for an old guy like me. I have lived a life of relative comfort and prosperity and I don’t want to live thru a depression or have my son live thru it. But I don’t believe it’s a question of whether, but when.
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