For those who thought the days of stimulus, bailouts and quantitative easing were behind us, think again:
[The] typical error most countries make coming out of a financial crisis is they shift too quickly to premature restraint. You saw that in the United States in the 30s, you saw that in Japan in the 90s. It is very important for us to avoid that mistake. If the government does nothing going forward, then the impact of policy in Washington will shift from supporting economic growth to hurting economic growth.
-Timothy Geithner on risks to the U.S. economy (source)
And to think that this entire time, since the financial crisis began, we were under the impression that you, Mr. Geithner, along with your colleagues at The Fed, The White House and in Congress, were acting with restraint.
Though the White House administration has spent the last several weeks telling the American people that there will be no more stimulus spending and that a recovery is slow but developing, what is one to think of Mr. Geithner’s comments?
Our assessment is that the economy is in complete shambles, and Mr. Geithner as well as the White House know it, otherwise we wouldn’t be bringing up the Great Depression again would we? If they stop spending now we can expect a repeat of 2007/2008. In fact, our view is that regardless of the spending we can expect not only a repeat of the financial and economic crisis of a couple years ago, but something a whole lot worse. The idea that we can somehow spend our way to prosperity is ludicrous, but that is not likely to stop the current trend in economic policies. The depression Mr. Geithner is trying to scare us into believing we can avoid is already taking place and the policies of the administration for which he works have not only failed to mitigate the problem, they have made it worse.
And though Mr. Geithner hints that we’ll likely be spending billions, if not trillions, more in coming months and years, we find the following statement curious:
We don’t have unlimited resources. We just don’t think it would be responsible for this country, given the size of our future deficits, and given the substantial burden the middle class has been bearing over the past decade in particular, to go out and borrow $700 billion from our children so we can sustain those Bush tax cuts that only go to the wealthiest 2% of Americans.
We definitely wouldn’t want to go out and “borrow” the $700 billion. Why would we do that instead of, say, cutting spending on superficial government projects. But, cutting spending is not something our economic policies are capable of accommodating. In the mind of Mr. Geithner, the President and most of our elected officials, it’s a much better idea to seize that money by way of force from the American people – regardless of how much money they make or whether they are considered the middle class or upper class.
Are we really supposed to take Mr. Geithner and President Obama seriously? They, along with former Secretary of Treasury Henry Paulson and President Bush, just committed in excess of $20 Trillion to our already $150 trillion in outstanding long-term liabilities and we’re to believe they are worried about borrowing money from our children and grandchildren?
Note to the Treasury Secretary: We’re now down to borrowing from our great-grandchildren.
At some point in the near future, our creditors are going to realize that the chance of our children, grandchildren and great-grandchildren ever paying back our consistently increasing deficits are nil. And then, folks, you’ll see the real economic collapse – the bursting of the so-called “Bailout Bubble” (i.e. the government credit bubble).
For the time being, we should probably get ready for more talk of the Great Depression and the possibility of tanks on the streets of America if we don’t let our elected and appointed officials continue to rape and pillage the hardworking citizens of this country:
Mac Slavo Views:
Read by 175 people Date: September 13th, 2010 Website:www.SHTFplan.com
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