For all the talk that the government’s policies of bailouts, printing money, and borrowing at record rates have “prevented” a second Great Depression, the truth is that all the government has done is to give the illusion of recovery while setting us up for an even worse Day of Reckoning.
Contrary to what Automotive News breathlessly declared, the Cash program pretty much was what anyone with common sense and decent economic training could have predicted. It spurred sales for a while, but after the money dried up, so did the new car sales.
Obama imposed new tariffs to please American union members, but the lower-paid workers in our country, however, will pay the deadly price, all in the name of “social justice” and “protecting American workers.”
Krugman is right that economists “got it wrong.” However, it was not a religious belief in free markets that caused the trouble, but rather government intervention, something Krugman never seems to mention in any of his columns.
From the Fed to the staggering weight of government spending and debt, we can see that Progressivism truly has run its course. Unfortunately, while it runs its course, Progressivism also is running this country into the ground.
From an economic point of view, a scarce good is a scarce good, whether it is medical care or sirloin steak. The problem is that government has piled intervention on top of intervention, and driving up the costs and making care less available in the process.
The reason booms must run aground is because the spending habits of consumers will not sustain the investment activity that has created the boom in the first place. The economic damage can be repaired only by the liquidation of the malinvestments so that the economic fundamentals again can be put into balance.
Most people cannot fathom decoupling government control and medical care, as though cost-raising controls actually improve medical service. Yet if we wish to have innovative and affordable medical care, that is precisely what must be done.