The Biz Bucks Blog provides former Biz Bucks students and other busy professionals with a summary and commentary of seminal articles from the opinion pages of the Wall Street Journal. You can be notified of a new posting by subscribing to the blog (enter email in box on right) or by following on Twitter: @BizBucksGuy.


Debt Never Sleeps November 10, 2014 10:00 AM | Tagged as O'Reilly

WSJ 11/3/2014, Page A15: “Missing the Prime Suspect in Global Slowdown” by George Melloan

Mr. Melloan is a former deputy editor of the WSJ editorial pages. He cuts to the chase about the deepening economic doldrums. The Keynesians are losing the argument. Debt is sinking the ship and they are on it. He writes, “The world debt, as a percent of GDP, has jumped 36% since 2008, to a record high of 212%.”  Much of that is government debt from continued allegiance to Keynesian spending. The economic blip that such spending drives is short lived, leaving in its wake a mountain of debt.  Paying this growing interest bill sucks the life out of an economy. Debt and interest never sleep. We are in for a long recovery until growth provides the underlying economy to pay down the debt burden.

Melloan also mentions that many economists believe the flood of much expected inflation has been dammed up by Dodd-Frank laws giving the Fed powers to limit bank lending. The Biz Bucks Guy believes this artificially sterilizes money. Once the dam breaks, inflation will result.

Melloan also provides a short summary of the reason for the 2008 recession that still haunts us. “The Fed well remembers what happened in 2006 when belatedly raising rates to a normal level caused pumped-up housing prices to fall. But it perhaps forgets that the most important factor in the 2008 crash was that falling house prices exposed the frailties of the many billions of dollars of toxic securities in circulation, held by the likes of Lehman Brothers, that were based on subprime mortgages engendered by government affordable-housing policies.” 

Maybe Bill O’Reilly of Fox News Channel should read and memorize that paragraph.  He grossly oversimplifies the 2008 crash as being caused solely by greed on Wall Street.

[Although opinion is included, The Biz Bucks Blog is primarily written to former students of Biz Bucks training courses to encourage their daily reading of the three opinion pages of the WSJ. This refreshes principles of Biz Bucks courses and improves business acumen on topics not discussed in Biz Bucks training.]


Posted By The Biz Bucks Guy
Posted in MacroEconomics, National Debt | 0 Replies

Subscribe to Our Blog

To receive email updates when a new post is made, please enter your email address in the box below and click Subscribe.


Keywords

Use these key words to search past blogs:


Archive:


Category:


1994 97% Alesina Recession Alinsky Allesina austerity Baloney BAT Binz bird kills Bogle Border Adjustment Tax Brulle Bryce capitalism carbon Carbon Dioxide CBO CFTC chains China Churchill Climate Climate Change Clinton Comparative Advantage Crichton Cronyism Cummins Curry Darwin Death panel demographics population economics Denier derivatives Dodd-Frank Drug dynamic Dynamic Scoring education electric car Energy Energy Policy Enron Debt Entitlements Eugenics Fat Fry Flat Earthers fracking free markets free trade Free Trade E-Verify Free Trade Zoellick Freedom Heritage Foundation Friedman gas lines Gas Prices glaciers Global Warming Global Warming Sustainability global warming subsidies IMF Globalization Trade God Google Gore Gramm Green Blob Grifo Groupthink Growth Hannity Hayek Hostess Hybrid Immigration Imports index funds Indexing Intellectual Denial investing investment IPCC JFK Joint Tax Kennedy Kerry Keynes Keynesian Keynesian Tax Cuts King Barak Bird Kills Koch Koonin Laffer Lamar Smith Lomborg macroeconomics macroeconomics;static; dynamic MACT Makiel markets Marxist medical care minimum wage Mitchell Model T Moore Morgenthau Navarro Neumark NOAA NY Times Obamacare ObamaCare Rove Health Insurance O'Reilly participation rate Patrick Moore peer review Peer Review EPA Piketty Pipelines plywood Presidential authority Price Controls Pruitt Racial divide Rare Earth Reagan Recession REE Renewable Portfolio Standards Renewables Ricardo Ridley robotics RPS Ryan Schlaff Science science integrity scoring Settled Science Shaffer shortages socialism socialized medicine Solar Panels Solvaldi Sovaldi static steel STEM Stephens Steyer stimulus subsidy sugar Supreme Creator tax policy Taylor territorial taxes corporate taxes Tesla Trade train wreck Trump unemployment wages Wind wind power women Zuckerman