Don't Panic!!!

polifrog



Michael A Walsh...

Already, we're hearing that action is urgent. If the limit isn't raised again at once, we face possible default on our sovereign obligations, a ruined currency . . . Somebody do something, quick!

Hold on. This is no time to panic. Instead, it's a time for sober, serious reflection, tough judgments and hard choices. Too bad there's nobody in Washington who seems up to the task.

Because panicking is exactly what we've been doing ever since the fall of 2008, when the housing bubble burst, Lehman Bros. collapsed, and Washington handed America the bailout of insurance giant AIG and the rest of the $700 billion Troubled Asset Relief Program -- followed soon after by the $787 billion stimulus program and the de facto federal takeover of GM and Chrysler.

Wall Street's fantasy finance (a joint production with Washington), which divorced "financial instruments" from any real-world concept of value, destroyed the housing market and seriously damaged the country, but Congress and President Bush were right there to bail them out, and this morning the stock market is sitting pretty at 12,506. Wall Street got theirs, while Main Street still suffers.

Keynesian Theory has lengthened 3 depressions, of course depressions aren't called depressions anymore. The current one in the US is referred to as the Great Recession while the other in Japan was called the 10 Year Recession but is now referred to as the more illuminating 20 Year Recession, as Japan seems mired in a seemingly endless economic nightmare of stimulus spending from which the nation is unable to awake.

What do the Great Depression, The Great Recession, and the 20 Year Recession have in common? The answer is that they all employed the failure that is Keynesian Theory.

Thieving from the future, while comforting today, yields a diminished tomorrow.




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