Many governments of the industrialized world are playing a game of deficit spending chicken, hoping credit markets will continue to underwrite their folly. . . .
. . . Memo to Washington: the markets are not fooled for long.
For proof, look at Tokyo. The Nikkei closed 2009 near 10,500. It closed 1989 near 39,000. And Japanese investors have it exactly right. Japan’s world-beating debt-to-GDP ratio has yielded an economy which was about the same size in 2009 as it was in 1993. Japan took a two-year sharp and painful recession and, through the miracle of deficit spending, turned a short, sharp recession into a two-decade absolute calamity. Now the rest of the world seems to want to follow suit.
Commenter Lebo gets it exactly right:
[The c]urrent approach of the government spending their way out of a recession/depression by printing/minting worthless money didn’t work for
Rome-
Germany
Argentina
Japan
UK
Or the USA during the “Great Depression”
So I think it’s great Obama, Pelosi, Barney Frank, Dingy Harry Reid et al want to try it again. Maybe it will work this time!!
"
Japan Leads the Way Down a Dark Hole." By J.D. Foster and Derek Scissors, The Heritage Foundation, 1/7/10.
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