Bad Policies on Both Sides

I've think I've made it clear that I'm fairly agnostic when it comes to politics. In my view, the problems we face nowadays can't be blamed on the right or the left, but on bad policies put forth by both sides.

So, when I heard Dan Mitchell, a Senior Fellow at the Cato Institute, say in the Center for Freedom and Prosperity video that follows the Bush-Obama policies are turning America into a welfare state, while referring to both Republican George W. Bush and Democrat Barack Obama as "big spenders," I have to admit my interest was piqued.

Listen as Mr. Mitchell discusses the explosion of government borrowing and what it means for America's economy:

(Hat top to The Daily Capitalist.)

Comments

[MontyHigh]

Pretty weak. Key chart is at 3:13 (freeze frame). Show that government debt as a fraction of stays under 100% for at least 10 years. Not so scary. Is this the best you can come up with?

MontyHigh, www.worldofwallstreet.us

[Steve]

Crazy to blame Obama for Bush's failures. This year, and the next few years', deficits are Bush's. The Cato Institute is just trying to paint Obama as a big-spending liberal. When he's really just a President is crisis mode, trying to save the world. No other sane person would have made any different decisions. To do anything different would have been insane.

I agree this whole house of cards will fall. The only question is whether we will get one more cycle out of it before it comes down. It's been financial armageddon since the early 1970s but each time the financial establishment has been able to pull the economy out of the fire.

Is this the final cycle or do we have one or two more? I'm betting on one more but I read your blog to keep on top of new evidence that we may not make it.

PS, the whole idea of deficit spending involves taking money from the future (our future generations) in order to keep this generation from feeling the pain. Combined with the rapid depletion of the world's oil riches over the last 40 years, it is the ultimate narcissistic act from a generation now living by the IBG principle (aka the I'll Be Gone principle).

Keep up the good work! Thank you.

[roger]

Cato Institute a typical mouthpiece for the Plutocracy
we live in

[Dennis]

It is clear that America's misery index is not high enough yet. Most people still support massively increased gov't spending. The people running Fanny and Freddie are being paid million of dollars a year. Meanwhile, the American public is buying their bad debts by the trillions. We have not received a bill in the mail for what each of us owe for these actions, but we will pay. Most likely in a lower standard of living. AIG sold what a trillion dollars of CDS insurance that they could not back. Now public money backs those promises. Do people really think there will be no cost to us for that behavior. Why did AIG execs not go to jail for that. You have to start verifying the business use of your cell phone, but many of these financial businesses have not been held to any kind of fiduciary standard. Comments indicate that the public seems satisfied with current gov't behavior. Things are guaranteed to get worse in that case.

[strainer3]

I think that based on the explosion of govt borrowing all fiat currencies are going to come into question in the next couple of years, and that's why I think one of the only safe assets to own is gold. and I just saw another m&a story in the gold mining sector at http://www.goldalert.com/gold-price-blog.php

Penmont trumped Goldcorp's offer for Canplats Resources for the 2nd time in less than a week. With all of the money printing the govt is doing, I think gold will continue to do well, which is gonna lead to more deals like this where the big gold miners acquire the smaller gold explorers

[jogleasop]

MontyHigh, Read the one little paragraph you moron. It says that both parties are to blame. If you are blaming Bush you are not intellegent enough or you
are part of the problem. There is no difference in the two parties. We will only be saved by a 3rd party that is not owned by wallstreet.

[Matt]

Read some books too.

"We will only be saved by a 3rd party that is not owned by wallstreet."

[kwark]

Yawn. Cato Institute . . haven't they gone bankrupt like all of their policy positions? On the other hand maybe I should give them their due, after all even a broken clock tells the correct time twice a day.

[alex west]

pretty lame... as long as people keep comparing us gov debt/personal debt/ etc
to GDP .. its useless.. dude has no idea what he's talking about... typical burocrat

here's example from real life

you make $ 100,000 and spend $200,000 .. what's deficit ?? its 100 percent
cause you spend 100 percent more you make.. its 101 math
you don't compare deficit to GDP or whatever.. you can only judge its BIG or small compared your ability to serve debt..

lets take US government... its going to spend $3.7-3.9 trln.. its gonn atake in taxes less then $ 2 trln.. what's is deficit ??? ITS ##UCKING ALMOST 100 PERCENT... not 10, not 15 % as compared w/ GDP... its useless to compare this way.. ITS 100 PERCENT..

what does it mean for my fellow Americans?? that means even if US gov will DOUBLE ALL taxes, it wont balance budget,,

thus US government continue run 2 trln$ deficit cause
government cant cut expenditures ( politics duh :),, so eventually higher interest rates will come, it will cause GREATER ECONOMICAL SPIRAL,, MORE money printing and in the end total currency debasement, money flow control, GOLD CONFISCATION and American civilization as we know WILL END..

enjoy
Alex