The US, and the rest of the world, which is not devoid of Keynesian nonsense itself, will pay a heavy price for the policies currently in place.
New jobs data has been released for August showing yet another decline in employment. How will this information by spun? Probably by saying that the rate of decrease is slowing.
Consider the following from the indespensible Chart of the Day:
Today, the Labor Department reported that nonfarm payrolls (jobs) decreased by 216,000 in August. Today's chart puts that decline into perspective by comparing job losses during the current economic recession (solid red line) to that of the last recession (dashed gold line) and the average recession from 1950-2006 (dashed blue line). As today's chart illustrates, the current job market has suffered losses that are more than six times as much as average (20 months after the beginning of a recession). In fact, if this were an average recession/job loss cycle, the number of jobs would have begun to increase five months ago.
Hands up all of the people who think that this is nothing more than a normal recession?
Does anybody really think that the recession has ended, as has been trumpeted by a number of leading media commentators?
Folks, the US is not out of the woods by any stretch of the imagination.
There is another real estate shock to come in 2010 when commercial property mortgages reset, which at the very least will retard growth.
Then there is the massive issue of banks falsifying their balance sheets by not marking asset values to the market in order to stave off insolvency.
I would be surprised if the majority of banks in the US today are not technically insolvent.
The problem is that the FDIC doesn't have the funding to deal with a large scale bank collapse.
Into this environment the Obama administration wants to introduce its healthcare bill, which is nothing more than an outrageous takeover of 16% of the US economy, and cap and trade legislation, which will have no effect on global climate - ever - but will definitely transfer wealth from the ordinary, hard working, tax paying folk to enviro-scammers on Wall Street.
We live in interesting times, that's for sure.