Vice President Joe Biden told the AARP today:
We’re going to go bankrupt as a nation. Now, people when I say that look at me and say, ‘What are you talking about, Joe? You’re telling me we have to go spend money to keep from going bankrupt?’ The answer is yes, that’s what I’m telling you.The quote is stunning both because Biden admitted that the U.S. is going to go bankrupt, and because he is still buying into what Mish calls the "Keynesian claptrap" of expecting a "free lunch".
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The Keynesian crap about "velocity" as the means to keep an economic shell game running has been as thoroughly disproven as any theory can be. No matter how fast you print, loan and spend money backed with nothing at all, in the end you're left with inflation, bubble and crash. This has been the cyclic nature of the Federal Reserve since their inception in 1913.
ReplyDeleteWashington's inner circle still believes in this hokum because they never see beyond the next election or budget cycle. Deficits are something for the next guy to worry about, not them. Unfortunately, most politicians have the economic savvy of the average third-grader.