Originally posted at Monty Pelerin's World blog,
The fraud that has been the US government and its effects on the Potemkin economy should be obvious by now. Yet our politicians continue to pretend the economy is growing and recovering. It is not. It is in a death spiral that their interventions caused and continue to feed.
The presentation below is another one from Gordon T. Long. This one includes Charles Hugh Smith as his guest. Both are worthwhile listening to, especially in this presentation.
What is discussed is expectations for 2014. The problems that may surface this coming year have their roots decades before. Each problem results from prior government attempts to stop normal economic corrections. Each was designed to stimulate the economy to avoid the necessary adjustments. Their effectiveness short-term was politically acceptable and was achieved by distorting prices, interest rates and lending standards. The intent was to send false signals to economic actors, to encourage them to behave in ways that helped short-term results but were harmful long-term.
For years short-run corrections were avoided or mitigated by this falsifying of economic signals. The cost was to make the economy weaker and less efficient. It also was to burden the economy and its participants with record levels of debt. This economic debauchery produced immediate good feelings in the same manner that excessive drinking does. It makes you feel good during the binge, but the next day is hangover time.
The economy has been wasted. These short-term highs have place it in grave danger. John Maynard Keynes replied to objections to his short-term remedies with the statement that “in the long-run we are all dead.” Keynes is long dead. Perhaps he was thinking only in terms of his lifespan. The rest of us are facing the consequences of such irresponsible policy.
Whether enough of the negatives hit in 2014 to sink the country is doubtful but not impossible. The saddest part about what is happening is that there is no political will to even recognize the path that we are on. From a political standpoint, no one wants to admit we are in trouble. As a result, there are no attempts to remedy our economic and social spiral to ruin, (and probably no way) to reverse the march to collapse.