Everyone knows that we are pauperizing our grandchildren, that the national debt is out of control, that Federal Reserve has printed money without backing thus debasing the dollar, that inflation will soon be out of control, etc. And it is, of course, the fault of the Democrats. But none of the feared events has happened. What has happened is wages remain low and unemployment remains high. That is because the serious people on the Federal Reserve boards and in the Republican Party - the know it all's who know nothing - control the House of Representatives. Here's a typically sage WSJ March 2011 doomsday prediction of the sort embraced by serious people like David Brooks.
Unfortunately President Obama took Bowles-Simpson seriously and offered to broker a deal on their terms. He obviously had spent too much time in Cambridge and sucking the teat of people who `know'. Fortunately in this case the GOP was too obsessed with demonizing Obama that he never got the chance, though government spending was unwisely restrained. - gwc
Erskine Bowles and Alan Simpson, who co-chaired the White House’s deficit-reduction commission last year, said Tuesday the U.S. could face a destabilizing fiscal crisis in two years or even sooner.At a Senate Budget Committee hearing on Tuesday, both men chided Congress for focusing so much time and energy on cutting domestic discretionary spending, which makes up about 12% of government spending, and not focusing enough on entitlement programs and the tax code. The U.S. has $14.1 trillion in debt and is projected to run a $1.65 trillion deficit in 2011. Debt levels are projected to grow rapidly, which many believe will force the U.S. to borrow more money from other countries.“This problem is going to happen long before my grandchildren grow up,” said Mr. Bowles, who was White House chief of staff during the Clinton administration. “This is a problem we are going to have to face up to it maybe two years, maybe a little less, maybe a little more.”He said the crisis is “predictable” and will take place when “our bankers over there in Asia begin to believe we are not going to be solid on our debt, that we are not going to be able to meet our obligations. Just stop and think a minute what happens if they stop buying our debt. What happens to interest rates? What happens to the U.S. economy? The markets will absolutely devastate us if we don’t step up to this problem. The problem is real. The solutions are painful, and we have to act.”Mr. Simpson, a former Republican senator from Wyoming, said, “I think it will come before two years.”Sen. Jeff Sessions of Alabama, the ranking Republican on the panel, said “the remarks you have just made are very sobering.”