The New Depression? Depressing stagnation at best

The Brits think so, calling 2010 a lot like 1932.  Voices of reason generally are calling for austerity measures to avoid a Greek debt spiral, while others (not counting the crackpot Krugman) insist that any belt-tightening must be accompanied by “ultra-loose” monetary policy.  I am not an economist.  And to point out now that monetary policy has been too loose for years (it has been) is not constructive.  We’re in the mess now.  We’ve had 70 some odd years to analyze, dissect and learn from the Depression–and no one has a clue.  I’m hearing from some quarters that we are at a stand or fall watershed moment in America, where failure means civil war.  Elsewhere we read of the end of the road for our financial system, spelling the end of our country as we know it.  But there are Pollyannas still out there.

I don’t have the answer.  But I do have a prediction:  our economy and markets are set for long term stagnation if our government continues on its current decision making course.  Things simply will not recover as we, especially those of us who entered the job market in the 1990s, think of recovery.  There are too many weights pinning us down, and there are more governmental tent pegs headed our way.  And this is best case.  Add in an exogenous event, most likely a bad one (e.g., terrorist attack on U.S. soil, Middle East conflagration, nuclear attack, etc.), and worst case scenario could be really really bad.

God knows we need strong wise leaders to rise up.  These are troubled times indeed.

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