This morning on CNBC Erin Burnett did a segment on “Street Signs”, discussing the supposedly recovering economy, during which she hosted a number of financial experts, querying their viewpoints on such topics as the escalating government debt, the increasing price of gasoline and other inflationary pressures , and the continuing debt crisis in Europe, and their effects on our financial future. One of the questions she asked was prompted by recent comments made by the CEO of PIMCO Financial, voicing concern over growing government debt levels and other financial risks to the economy; “Are we living in a new normal?”
It seems difficult to argue that we are living in a new world, but I find it very disheartening to accept the premise that the current economic conditions may be “normal” or that we should accept them as such. The financial wizards on CNBC all seemed comfortable with the premise though; one of them even going so far (or not so far) as to say that he felt that we were in a “new normal”, but that it was starting to look a lot like the old normal… Huh?? As for the government debt levels, they also all tended to agree that this escalating debt is not really a problem since governments have an indefinite longevity and therefore it is fine if their debt lasts forever also. Yikes!! Obviously none of them ever studied history; have we forgotten the Romans, the British Empire, the once mighty Egyptians. So far there has never been a civilization, much less a government that has lasted forever, and most that collapsed did so at least in part due to fiscal malfeasance.
I doubt that we should be looking to the self-serving financial experts, who took us to the brink of financial Armageddon a couple of years back, for any leadership out of the remaining morass, and I have even less faith in the financial press as any sort of voice of reason or even truth. If we have not learned from our mistakes we are most likely destined to repeat them; the increasing frequency and severity of the financial bubbles we have suffered through are proof enough of that I think. The pundits who claim that high government debt is not a problem have their heads stuck somewhere other than on their shoulders (or think that we do). In their short-sighted fantasies I have no doubt that they are comfortable with the scenario, but I for one do not want my tax dollars to be used to pay interest to the banks and financiers who are getting rich off of our stupidity while leading us toward a dark and uncertain future that they will most likely not suffer through.