This is only a delaying tactic.

There is no way to have a recovery in this current crisis without a depression that rids the nation of all the decades of excesses that have built up.

http://www.financialsense.com/fsu/editorials/bloom/2010/0125.html

One for the bears.

We have not changed any policies that got us in this mess. We are in the eye of the storm with the calm only lasting as long as the U.S. can borrow enough to keep stimulus spending this high. Even a decline will cause huge downside problems. Due to the lag factor that could be months or a year or so but, we can’t afford to even reduce stimulus.

Yet, if we don’t, we also risk running out of ways to monetize the debt enough to keep interest rates low which would also destroy any chance of recovery.

What could keep this happening? Only hyper-inflation and we don’t want that either. It would drive the price of homes and markets up, but, not their value.

Remember that we can’t grow or tax out of this and cutting spending causes a huge depression as 1 in 4 jobs are tied either directly or indirectly to government spending.

We currently have 40 million citizens getting food stamps. We have applications for S.S. that exceed all projections and are causing us to have to borrow to make up the short falls. Last year Medicare went cash flow negative.

We will add about 4 million a year to the retirement rolls even with current death rates due to the boomers retiring. We go from 37 million to 71 million retirees in 20 years. The government says we need over 3 workers for each retiree and jobs aren’t supposed to even bring unemployment down to 8% for 10 years or more.

All of us, citizens, included, have about 50 some trillion dollars in assets but our debt and obligations is $120 trillion. As the Government Accounting Office has warned year after year to Congress, this is unsustainable and yet, we are increasing the ratio of debt and obligations almost daily to assets. We are running out of lenders as they realize we can’t pay them back and our interest on debt is projected to quadruple to over $800. If it was that now, it would be larger than any other item, including defense, S.S. and Health and Human Services.

That is what is on the other side of the “eye” of this storm. We just don’t know when it will hit. We don’t know when but, we do know the more we continue these policies, the worse it will be when it does arrive.

- JanPaul

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• We can’t grow or tax out of this crisis.
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