From the earliest moments of the current, ongoing economic depression, our leaders signaled their fear by hastily concocting programs that postponed the reckoning that had to come.
Douglas French, writing about housing finance today, says a lot simply with his title: “Markets Stagnate Until They Clear.” Government policy has kept mortgages in a weird limbo, and market prices at unnatural highs. Our geniuses in power have even moved heaven and earth to reinflate the old housing boom.
Better to have let it crash and recover rather than keep it unworkably hobbling along.
But the clearing of markets scares politicians silly.
Right after the 2008 implosion, our leaders increased unemployment insurance and offered many new cushions for workers. Humanitarian? Or just another way to avoid new, lower wage rates to match the monetary collapse? I’m not sure about the latter, since the “wages” of not working proved so effective that many workers stayed unemployed voluntarily.
The cost? An extended, lengthy depression.
But that’s not all, of course. By putting more people onto the rolls of the federal government’s dependents list, the burden on taxpayers and on the debt system increases.
Meanwhile, politicians still cannot imagine a way to do what a few other countries, including Canada, have done: cut back on spending and balance budgets.
Our politicians will do anything to avoid that!
Some folks are calling the current period “The Great Recession.” I suggest a better term: “The Great Evasion.” And what’s being evaded is responsibility.
This is Common Sense. I’m Paul Jacob.