US Facing An Unsustainable Crisis
The strange French of “financial literacy” is once again being touted in Washington. “Although historical experience and economic theory do not indicate the exact threshold at which the perceived risks associated with the U.S. public debt would increase markedly, we can be sure that, without corrective action, our fiscal trajectory will move the nation ever closer to that point,” says Fed chairman Bernanke. Quite simply put, the United States federal government can’t continue operating as it has been over the last decade or more.
Bernanke says that an economic recovery is underway and that Washington risks undoing that. According to some, “bipartisan politics’ is part of the problem. Like most Americans, I’m hardly fooled by such talk. One of the largest problems in this nation is that politics in both parties has become more and more synonymous. The only difference is advertising and perception, a problem that some politicians feel must be changed this election. The real problem is that any change is just window dressing. The power behind the throne remains the same.
Spending, jobs and national production have only recently began to indicate the possibility of improvement. Those in financial circles are fearful of continued stability with record government spending. The politicians see staying the course as a kind of guarantee that the job market will continue to improve. Stable prices is the other goal as the nation faces hyperinflation from continued ‘quantitative easing,’ the vernacular that indicates printing more greenbacks. Why is Bernanke cautionary? He realizes that at some point the Federal Reserve cannot continue their present course and expect the financial rivets to stay the hull. The iceberg of uncontrollable inflation is staring him in the face. Even an overextended global currency can’t continue forever without credit restraint. Even Bernanke is smart enough to see the signs.