It is undeniable that we are on the path to fiscal collapse. This decline will occur in two stages. First there is the decay as the swelling national debt wears away the economy’s foundations and commits more and more future income to foreign creditors. We are already in stage one.
In stage two a lethal combination of phenomena arises in quick succession: greater default risk, looming inflation, higher interest rates, declining growth, financial market instability, and an acceleration of government borrowing. They feed on each other. The economy heads on a downward spiral. Between stage one and stage two there is a tipping point. Experts know it will come, but nobody wants to predict when. (See below.) This article is about the slow economic decline of stage one. Next week part 2 will describe the hell of a full-blown fiscal collapse.
There is no question economics has failed us. The old paradigms have been made obsolete by the hard reality of the 2007-2009 financial crisis and soaring government debt. But some ideas can be salvaged from the wreckage.
The tipping point occurred when the Obama administration began paying people taxpayer money to intentionally destroy hundreds of thousands of perfectly good automobiles to prop up its new nationalized automobile company and the auto workers union. Total fiscal insanity by the government was reached at that point.
Never saw anything in the MSM re this. Links??
It was the so called “Cash for Clunkers” program.
#2 – From ABC News:
Yes, the government was destroying perfectly good cars.