Posted on 03/28/2010 5:26:58 AM PDT by HangnJudge
In an article in the Atlantic entitled “My Inflation Nightmare,” Michael Kinsley worries about the future of the economy. He fears that inflation, perhaps hyperinflation, is a likely next stage in the economic crisis. His fears contradict the respected liberal economists Paul Krugman and Larry Summers. They argue that deflation is the likely outcome...
...Mr. Kinsley should realize that it was these and similar experts that got us into this mess. Neither of these experts ever saw it coming, despite their expertise and mathematical Keynesian models. One is an ideologue and the other an employee of the administration. Does Mr. Kinsley believe they could publicly speak out against inflation, even if they believed it to be a certainty?
Kinsley’s intuitive conclusion is grounded in “the realm of psychology.” If, by that, he means human behavior and motives, he is on sounder ground than most so-called economists. Proper economics always has been the study of human action. Abstract mathematical models, introduced in the “Keynesian revolution,” banished human and political motivations from consideration. Economics was then reduced to a sterile black-box contraption, at least in the minds of “sophisticated” Keynesians.
The key insight and worry in Kinsley’s article is that “no one in a position to act has proposed a realistic way out of this debt.” Is it possible no one understands the problem? Perhaps they have been too busy to deal with it. He muses about this issue in a way that suggests he may know the answer but not want to reveal it. Quite simply, the issue is ignored because there is no politically palatable solution! It is impossible for the U.S. government to honor its obligations.
(Excerpt) Read more at pajamasmedia.com ...
It is impossible for the U.S. government to honor its obligations.
Ya think?????
And from a linked blog...
http://www.economicnoise.com/2009/11/28/spiraling-to-bankruptcy/
If the Government confiscated everything, the social programs would still be $50 trillion short and the Government would still be bankrupt. Furthermore, no company or individual would be left with anything.
The debt problem is intractable. This conclusion is not economic but mathematical. It literally is mathematically impossible to get out from under the level of existing debt. To demonstrate, only the Federal Government will be dealt with. Such a focus greatly understates the actual problem, because it ignores personal debt and lower-level government debt. States and municipalities have grown well beyond sustainable levels and are running large deficits. Some defaults have already occurred. Individual bankruptcy filings are soaring as are foreclosures.
Great Graphic!
Ping to use in future...
http://seekingalpha.com/article/195897-the-housing-bottom-is-not-yet-in
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