Your editor is starting work on a new book. It will explain everything that needs explaining... at least about economics and politics.
Stay tuned to learn more about the little known law that governs almost everything (at least everything we can talk about in a family publication).
Why empires fail it's covered...
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Why there can be no recovery... that too...
Why you can have too much safety, too much healthcare, too much education, too much money, too much stuffand too much of too much!
And, oh yes, our new book is also going to explain why economists are completely incompetent. They claim to know things they could never really know and to be able to do things they couldn't do in a million years. As a result of their conceits and delusions, trillions of dollars have been clipped from the world's GDP, billions of people are poorer, their lives shorter, meaner, with less stuff.
Economists were largely responsible usually in their policy-making roles for the huge credit bubble that took debt-to-GDP in the US from 112% in 1972 to 296% in 2008. They told the feds that they needed a 'flexible' currency. What they got, of course, was one that was flexible in one way only it stretched out but never came back. Credit expanded 50 times in the last 50 years.
Then, when the debt bubble blew up in '08-'09, economists stepped in again, this time to prevent the private sector from setting things right. Instead of letting a crash and quick depression wipe out the excess debt quickly, the feds engineered a 'contained depression' which can go on for decades.
What contains the depression? More credit!
Deficits, bail-outs, subsidies and the lowest interest rates ever. You can look throughout the developed world: the highest interest rate offered by central banks for short-term money is only 0.75%.
And now economists are warning that the US tax economy could fall off a fiscal cliff' at the end of the year. Tax rates will go up. Automatic spending cuts will come down hard. This will allow the depression to break out of its cage, or so they worry.
"Stop, before it is too late," they say.
Over at the Pentagon, for example, contractors are forced to worry that their next boondoggle might be cut off. Military cuts threaten Barack Obama's programme of 'Strategic Guidance,' says an article in today's Financial Times. In addition, one million jobs could be lost! The US would fall into real depression!
If only!
Since the crisis began, private sector debt has gone down, but only to 250% of GDP. That's still more than two times what it was when the US still had honest money. Much of that debt must be 'bad' in the sense that it couldn't withstand a financial crisis or wouldn't still be on the books were it not for the feds' clumsy meddling. That's why nature, in her wisdom, provides us with natural debt-cleansing episodes -also known as depressions.
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