“3.47 Times” Is the New Normal
Debts and lies are generally mixed together.
– François Rabelais, The Horrible and Terrifying Deeds and Words of the Very Renowned Pantagruel King of the Dipsodes, Son of the Great Giant Gargantua (c. 1564)
The Donald is on to something with respect to our sputtering economy – even if he is a little off about the causes and the solutions.
As it happens, July’s trade deficit of $73.1 billion was among the five worst in history. And there’s no confusion about which way the trend’s going…
It’s fair enough to say America doesn’t make or manufacture much anymore. But it’s well past time we acknowledge this is a big problem.
At least our Tweeter-in-Chief – erstwhile builder of high rises, hotels, and casinos – understands that much.
And that’s better than Wall Street economists, who get all giddy when imports soar because “consumers are spending up a storm.”
This ballyhooed binging is fueled by maxing-out credit and/or liquidating savings accounts.
It’s not based on production and income.
Here’s the Acela Corridor’s Keynesians: “Balance sheets are irrelevant. It’s all about the period-to-period money flows…”
Never mind any of that bollocks.
The everlasting truth is that neither household nor nation can borrow its way to prosperity.
But that’s exactly what America’s economic policy has amounted to since Nixon pulled the plug on the gold standard in August 1971.
And that’s exactly why the largest and richest economy in the world went from “modest creditor” to “$8 trillion debtor” in little more than 40 years.Read More