January 2, 2009

Roger Ehrenberg

After I've been thinking a semblance of normalcy is returning and watching the stock market move upward, this is chilling:
...the economic underpinnings of the US have become so fractured that it risks being marginalized on the global stage. This "change in fundamentals" that is creeping up on us? Our creditor's willingness to hold dollar-denominated assets in general and to finance our persistent budget deficits in particular. This is the real credit crisis facing the US.

Why are things different this time? The Great Depression is held up as the singular economic event in the US to be avoided at all costs. The Government put "safety nets" in place to help those who cannot help themselves in difficult times. But this doesn’t tell the whole story. We, as a nation, have been spending far beyond our means for generations; so much so, in fact, that the purported safety nets place a greater risk to our future than the risks they were created to avoid...
(Boldface mine.)

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