The US debt story with a bit of historical perspective. Here we find an example of Change You Can Believe In, care of the blessedly departed Barack Obama over the period 2009-2017. Consequences include slower growth, limited if not actually negligible increases in the real wage, additional upwards pressure on the price level and some additional increases in rates of interest. But really, where’s the constituency to do anything else? How many non-Keynesians are there, never mind anti-Keynesians?
Remember this? Remember how it ends?
What’s changed and how you gonna change it? Still, there are regulations going and public spending is being better targeted. Large numbers are being peeled from the welfare rolls. Not good, but if the deficit is rising and you’re a Keynesian, what’s the problem? And if you’re not, what are you going to say to convince them otherwise? You will certainly never convince the people spending the money.
Of course, there is then this from Drudge yesterday:
But then there’s this from today:
Really, you only wish people knew how things worked, as in some business comes up with an idea, borrows some money to buy in some capital and labour, and then produces goods and services that are sold on the market for a profit.
There is endless entrepreneurial drive in the US. With a President who is an entrepreneur, who knows what’s possible? But there are also those economists at the Fed and the Treasury. As the old joke had it, the final group in the military parades in front of the Kremlin were the Soviet Union’s economists because “you have no idea how much damage these people can do.” Same again here.