2009-09-07

U.S. Could Become a Third World Country

Similarities with the Great Depression? Even Nobel Laureates are getting on board:
Although the authors support the Federal Reserve's moves to slash interest rates to just above zero and embark on quantitative easing, pumping cash directly into the system, they warn that greater intervention could set the US back further. Rowley says: "It is also not impossible that the US will experience the kind of economic collapse from first to Third World status experienced by Argentina under the national-socialist governance of Juan Peron."
Barack Obama accused of making 'Depression' mistakes
From an article by one of the authors, Charles K. Rowley:
The US economy suffers from a growing culture of indebtedness that has increasingly contaminated the federal government since 2001 and has spilled over dramatically into private household behaviour. The combination of the ill-conceived fiscal-furnace fired by President Bush and the US Congress and the reckless monetary-furnace fired by Alan Greenspan and Ben Bernanke throughout the period 2001-2007, created unsustainable housing market and stock market bubbles whose collapse brought on the financial crisis and economic contraction of 2008-2009.
This is a perfect example of why Obama's poll numbers are plunging. The public has completely shifted mood. There is debt revulsion among the people, but the politicians were elected before the mood shift. Politicians, including Republicans, are out of touch with their constituents because in the words of Dick Cheney, they believe "deficits don't matter". Deficits don't matter when the public is on a debt binge; deficits matter when the public wants a balanced budget.

Here's a link to their paper:Economic Contractions in the United States:
A Failure of Government

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