Having read some of the articles on the decision by Standard and Poor to downgrade the credit rate of the USA, one question came to my mind: is the person who made the analysis a left wing individual? The reason for asking this question involves the comments regarding the Bush tax cuts that were not allowed to run out at the beginning of the year. I suspect that the analysis is in fact fundamentally flawed.
This is a developing story, and for this reason I will leave the post on sticky so that I can make appropriate updates. I am still trying to absorb the information.
Also, Australia is having its own mini crisis because like the USA we have a usurper as Prime Minister, who is also a Marxist and who is pushing a Marxist agenda. Some of our economic indicators are starting to tank. Consumer confidence is well down on last year. The reason is quite obvious to everyone except the sycophants – it is the resource rent tax and the tax on the air we breathe stupid. Yes, we have they hysterical globull warming crap being thrown at us day by day. It is getting to the really ridiculous stage at the present time. Even something like an unseasonably warm beginning to August has been enough to send some of the watermelons flipping out screaming “it is global warming, it is global warming and the sky is falling”….. well you get the picture, and boy are these people extremely dumb and stupid with their hype.
This crisis is having world-wide implications as it seems to be setting off a little bit of panic.
The problem that has been created goes back to the application of Keynesian theory. Please keep in mind that Roosevelt did not apply Keynesian theory, but applied Roosevelt theory when he began the rot during the 1930s depression.
The point here is that the continued use of the failed Keynesian theory has exacerbated the situation, not just in the USA but on a world-wide scale. In particular this is true of the U.K. where Lord Keynes was influential, and ditto in Australia. Nothing was learned fromt he experience of prolonged stagflation in the 1970s.
Now this is where I am in disagreement with Carlyle and a number of other people. I do not necessarily blame Keynesian theory for this situation, even though it is a factor. The reason that I do not lay blame entirely at the feet of Keynes is that I look to the actual government and I find that it is Socialist governments that tend to overspend on their welfare policies.
What needs to be examined in some detail is the history of welfare spending, not just in the USA, but in Australia, New Zealand, Canada, the UK, Europe and Asia. We can learn a lot through examining that history. The best examples are in fact the UK, Greece, Spain and Australia, probably followed by the USA. I am more familiar with the Australian experience. What I see is that since about the 1930s there was a steep increase in welfare spending of various sorts, and it is this welfare spending that has gotten out of control. However, the modern experience is showing me that it is not just welfare spending, but spending in other areas, such as on school halls, pink batts, solar panels, NBN network, feasibility studies for VFT and a range of other expenditures that shows a clear wastage of money.
It is this wastage of money that is at the heart of the budget deficit in the USA, as well as in Australia. In Australia the government of the day is clearly out of control, authorising expenditure on items that are clearly white elephants. If this expenditure is not brought under control then we will continue the slide into stagflation.