Bernanke Encouraging More Fiscal Recklessness

Bernanke says that we could enjoy a "very good year". We just have to ignore the long term and borrow and print and spend like madmen, and it will be great next year. The fact that he and others are calling cutting spending and raising taxes a "fiscal cliff" indicates that they are committed to outspending revenue until the whole system goes off a real fiscal cliff (not that raising taxes wouldn’t backfire). In other words we are addicted to borrowing, printing, and overspending and don’t have the courage or the political will to rein in spending and go through the difficult economic adjustment necessary to get back on a healthy, sustainable footing. Will the new American energy revolution in oil and natural gas development save us? It is helping us avoid much of the pain already, but could perpetuate these horrible economic policies by holding off the consequences they would otherwise bring on with great force. QE III is targetting mortgages so we will probably see some re-inflation of housing prices until that shot of cocain wears off and it begins to look like Housing Bubble II instead. Who knows, but all this manipulation doesn’t create wealth but transfers massive amounts of it. Hard work and honest trade becomes less and less rewarding, while working the corrupted system becomes the easiest way to make it in a system with less and less accountability, transparency and integrity.
Budget Fight Threatens U.S. Recession, Bernanke Says::…D4E-1

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