We cannot paper over our debts
Peter Rudolph Zidek had a brilliant way of capsulizing what led to our economic crisis and why solving it will require better ideas than creating money out of thin air. His comments should be read by everyone, from common-sense conservatives to liberals hoping they can vote for candidates who claim to have a magic supply of pixie dust to pay for all of the things they want that we can't afford. He wrote:
“The central truth of economics is scarcity. There can never be enough of anything to satisfy everyone. The central truth of politics is patronage: promising to give everything to everyone. Paper money is the bridge between economics and politics.
The unpaid debts of an entire generation of people in Western countries are coming due. The so-called “baby boomers” grew up in a world dominated by Marxism and Keynesian economics. These are bad ideas. They are destined to collapse.
The leadership of the United States is driving our country directly off a cliff. They are pretending a day of reckoning will never occur—that Bernanke can successfully paper over these debts along with however many trillions of additional dollars are necessary. This is the absolute height of ignorance. The destruction of our currency and our country's standing in the world's economy is certain.”
Commenting on this, Thomas Rock wrote:
“That is it in a nutshell. There was a long paper chase leading up to this; the press has been for years telling people that their nest eggs weren't big enough, so the rush to amass more savings led to more and more paper running to the bigger returns. Ponzi scheme on Ponzi scheme became the order of the day. This correction was long overdue, but our government borrowed more to hold their friends harmless to the correction. So instead of a painful correction we are stuck with a massive collapse. That is what we get when we elect a snake oil salesman instead of a doctor. When the economy was sick, Obama prescribed a concoction of sugar, alcohol and drugs, when all the government had to do was go on a diet and exercise.”