BernankeWhen Fed Chairman Ben Bernanke speaks on Friday at the Fed’s annual meeting in Jackson Hole, Wyoming, Fed-watchers from around the world will be hanging on his every word, phrase, and nuance for clues. They’ll be listening to hear that the chairman knows what’s happening in the economy, and that if things get worse, he has a plan.

money with flagThink you’re scared enough about the economy, the ballooning deficit, and the prospect of ruinous tax rates and runaway inflation to pay for astronomical government debts? If you haven’t read Boston University economist Laurence Kotlikoff’s August 10 article for Bloomberg (“U.S. Is Bankrupt and We Don’t Even Know It”), you probably aren’t.

Following on the heals of the previous week’s stunning 484,000 new unemployment claims, the rise to 500,000 announced August 19 offers proof that the U.S. economy is far from the path to recovery. According to a story in the New York Post:

cutting taxesCutting taxes is again in vogue in a Washington, D.C., increasingly dismayed by the utter inability of the massive Obama stimulus package to jolt the economy back to life. President Obama himself has become a grudging disciple of the Bush tax cuts, and is now advocating an extension of the tax reductions beyond their expiry at year’s end — but only for Americans earning less than $200,000.

debtA national debt is nothing to worry about, because “we owe it to ourselves” —so runs one of the more popular sophisms of Keynesian economics.