The former US Vice Moron, Dick Cheney said that deficits (ie. debt) did not matter. That administration then went on a spending spree with its major expansion in Medicare, its poorly executed wars in Iraq and Afghanistan etc. Instead of facing up to these costs then and asking its citizens to make the hard sacrifices, President Bush and the feds encouraged its citizens to go into a debt induced spending spree. The same was tried during the failed Vietnam war. The result was huge deficits and hyper inflation in the US after an initial period of false prosperity.
The problem with Paul Krugman is that he is advocating huge levels of deficit spending to get the US out of the current mess. I really don't understand how anyone can solve the problem of excessive debt, but going into even more debt. They should have let GM and many of the banks fail. Nations often perform best under adversity. This downturn is a natural correction to the excesses of the past. I fear the policies of the current US government are only pushing the day of reckoning to some date in the future. I don't want to be holding too many US$ when that happens.... maybe it is already happening. Marlon --- On Tue, 6/2/09, Gilbert Lawrence <[email protected]> wrote: > From: Gilbert Lawrence <[email protected]> > Subject: [Goanet] Villains of the Financial Mess > To: [email protected] > Date: Tuesday, June 2, 2009, 11:07 PM > Yesterday was a red-letter day for > American industry. General Motors, the largest private > company in the USA, and perhaps the world, filed for > bankruptcy. The auto industry in the USA was started about > 100 years ago. Now the largest auto-market in the world is > reported to be China. It is just a matter of time that > Chinese and Indian made cars will be sold in the USA. One > report, I read gives three years for the Tata Nanos to be > sold in the USA. > > As in any failure, there are multiple factors at work. And > these factors are usually at work over a long period of > time. Here are two articles from the New York Times that > reviews the villains of the financial mess. One of the > articles written by a respected authority who won a Nobel > prize in economics. He could be described as the model of > respectable intellectual centrism. > > http://www.nytimes.com/2009/06/01/opinion/01krugman.html?_r=1&partner=rssnyt&emc=rss
