So Martin Wolf, here:
In 2007, US gross private borrowing was 29 percent of GDP. In 2009, 2010 and 2011, however, it was negative.
Above all, private sectors are running large surpluses of income over spending. In the U.S., the financial balance of the private sector turned from a deficit of 2.4 percent of GDP in the third quarter of 2007 to a surplus of 8.2 percent in the second quarter of 2009. This massive shift would surely have caused a huge depression if the government had been unwilling to run offsetting fiscal deficits. That is how the depression was contained. ...
Austerity should follow a strong recovery, not proceed [sic] it.
Should! What a crock!
Private actors in every economy everywhere work every day year in and year out in the hope that they will and the belief that they can save enough to enjoy and care for themselves and their families, but governments never save a damn thing, not even in the good times, which is why citizens hate taxes.
The promise of the time value of money leads the wise always to save, and when they cannot save to economize. Truly exceptional individuals always do both, but neither idea can even be found in the track record of governments.
Think of it as a form of bipolar disorder writ large. The whole world is suffering from it.
"Liberalism is a mental disorder."
-- Michael Savage
