This is a great article from my friend and fellow ACA Financial Planner. It is worth spending a few minutes to read.
April 16, 2013
David Stockman, President Ronald Reagan’s Budget Director, authored an opinion piece published in the Sunday New York Times on March 30, 2013. His provocative conclusion is that eight decades of bipartisan Keynesian spending and Federal Reserve money-printing have left us exhausted and bankrupt. The article can be referenced here.
His article certainly outlines a doomsday scenario, buttressed with historical trends and US policy gone awry. I would refer my readers to a blog I wrote a month ago – which is now distributed by a number of online financial websites – titled “The Race to Zero Interest Rates.” This lays out a similar financial unraveling, but emphasizes the global scale of the issue. Today, more so than the past, our issues are intertwined with international reactions. The article can be found here.
Most observers agree with David Stockman about the likely outcome of debilitating inflation, but no one knows when this outcome is likely to happen. My article explains some key global factors that may continue to dampen inflation for awhile – perhaps even for 10 to 20 years.
There are an infinite number of factors that impact the global economy, which now shapes the US economy to a large extent. Also, economies don’t evolve in a straight line, but are molded by many factors interacting simultaneously.