Easy Money, Hard Truths

Is the U.S. doing enough to keep debt from spiraling out of control? The signs are not encouraging.

http://krugman.blogs.nytimes.com/2010/05/27/bad-analysis-at-the-deficit-commission/

http://krugman.blogs.nytimes.com/2010/05/27/conventional-madness/

Yes, they are. The inflation and deficit hawks are as crazy as the bond vigilantes.

The Europeans are sending their money here for safety. See the stock market.

David Einhorn wants to avoid falling off the cliff by diving off head first.

The monetization of debt that he sees is a desperate effort to replace losses in the continuing real estate crash. The inflation rate is below 1% and falling and he wants to raise taxes now. To do so would immediately kill investment dead. Unemployment would climb rapidly. the price of gas would fall on the world depression. there would be no buyers as all ready funds would be held for the bottom which would recede at least as fast as the crash.

The US economy is on life support. A significant tax increase other than on the very wealthy would be devastating.