Former Federal Reserve Bank Chairman Alan Greenspan (left) came up with a novel way to claim the U.S. government would never default on debt: print the difference. Greenspan told NBC's "Meet the Press" August 7, in response to a question about the recent downgrade in the U.S. bond rating by Standard and Poor's:
Item: In the Wall Street Journal for May 26, Cass Sunstein (photo at left), the President’s top regulator, wrote: “A 21st-century regulatory system must promote economic growth, innovation and job creation while also protecting public health and welfare. Earlier this year, President Obama outlined his plan to create such a system by adopting a simpler, smarter and more cost-effective approach to regulation. As a key part of that plan, he called for an unprecedented government-wide review of regulations already on the books so that we can improve or remove those that are out-of-date, unnecessary, excessively burdensome or in conflict with other rules.”
Britain's leading financial newspaper, the London Financial Times, now believes that the U.S. economy may be headed toward a Japanese-style "Lost Decade."
The stalling of the US recovery raises big, scary questions. After a recession, this economy usually gets people back to work quickly. Not this time ... traits seen as distinctive strengths are now weaknesses, and a “lost decade” of stagnation, like Japan’s in the 1990s, might lie ahead.
The Japanese economy has experienced zero economic growth in terms of Gross Domestic Product (GDP) since 1991. In essence, the Japanese have experienced two "lost decades."
President Obama commenced his weekly address on Saturday by subtly blaming sluggish economic growth and high unemployment on his predecessor — the Bush administration. In prototypical Obama fashion, he reminded the American public that the economic plunders of today did not strike on his watch, and that his administration inherited "the worst recession since the Great Depression."
"I wish I could tell you there was a quick fix to our economic problems," the President lamented in his weekend dialogue. "But the truth is, we didn't get into this mess overnight, and we won't get out of it overnight. It's going to take time."
Anyone paying much attention to the news is aware that the U.S. government is now about $14.3 trillion in debt and considering borrowing even more. That $14.3 trillion, however, only includes what the government currently owes. If one includes Uncle Sam’s unfunded liabilities — promised future payments the government does not expect to have revenue to cover — Washington actually owes “a record $61.6 trillion,” according to a recent USA Today analysis.