This is Enron-type bookkeeping chicanery writ large. Don’t let it fool you just because it is being given the stamp of quasi governmental approval through the Fed, or because it has the smiling endorsement of the Goldman-Sachs stacked Obama administration. These guys are corrupt from their wingtips to a foot past their double-Windsors. They make the Reagan administration look like a gang of kindergarten bandits.

1) I’m not convinced there is a way to create an economy that has continued, sustained growth. Hyman Minsky wrote compelling arguments that stability breeds to instability (think the housing market), and vice versa. We shouldn’t have continued long term growth as a target as it is unrealistic – rather we should aim for less drastic swings each way (like creating regulations to prevent abuses that lead to high short term gains followed by massive losses)
2) Does Nock have the solution we need? Can you imagine the adjustment costs associated with such a change…? Too radical for my taste.
3) Denmark seems like an admirable society, but undoubtedly what works in Denmark won’t necessarily work in the states (although income taxes have been that high before). We are a much more diverse, distinctly different culture… I do hope the US looks to the European nations who have been around for much longer than we have for guidance, though.
4) I, for one, am not as concerned about deficits or our currency. Defaulting on our loans is a ridiculous idea to me – Mexico had to do it in the early 80’s and it had massive impacts on the world. We are no Mexico… We are able to leverage because we have credibility as an economy (for most of our history) and should continue to in the future. Think of a (relatively) stellar student taking out huge student loans to go to school – why shouldn’t they? What other student would you loan to in the world? And look at countries who are at a trade surplus… do we really want to be a net exporter? Let’s face it – we are consumers and high skilled workers so we probably won’t be in a trade surplus any time soon. Don’t forget how massive our GDP is, give ourselves some credit and don’t crap your pants about being leveraged.

The graph you posted fits perfectly with Keynesian theory. It will be fascinating to examine the bailout in 10 years to see how close to theory it plays out… with global economies becoming interconnected and information becoming more available everywhere, the idea of one super power economy far greater than the rest is unrealistic. For Stephen Covey fans out there – it is greater to function cooperatively than independently.

Don’t buy in to doomsday talk and stay civil people :)

[One of the purposes of government is to step in during a crisis and take action when smaller entities in the commercial realm can't or won't address an issue. Katrina didn't have a "private sector" solution, it required an emergency response from the government. Attacks from North Korea would require a similar response.

Framing this as "spending money we don't have" is completely wrong. - Dan ]

I say this not as someone who hates America but as a realist who has the opportunity to see America from an outsider’s perspective. I live in New Zealand and somewhere in the 80’s NZ decided to try and mimic America all to its detriment.

When New Zealand was a socialist country there was a lot of needless government jobs. While needless they did employ a vast amount of people meaning unemployment was quite low. When NZ went capitalist those government jobs disappeared and New Zealand’s unemployment went massively through the roof.

When NZ was socialist people looked out for each other. Now that it’s capitalist they had to actually build a government department called OSH to put accountability on people for their own actions.

Because NZ has only 4 million people the issues that America is quickly facing happened at an astonishing rate to the point where NZ is not the country it was 20 years ago and all for the worse. Big business has raped and pillaged this country and then taken that money overseas. That would never have happened under socialism and therefore the economy would not have been as poor as it is today.

Here is Wolfram Alpha’s analysis of unemployment.
http://www.wolframalpha.com/input/?i=unemployment+rate

PhilipWing

Well, this chart shows something embarrassing to those Obama fanboys (including the Nobel committee) – Bush’s policies, when he got moving, worked, just like the military surge in Iraq worked. Oh, and to Lowededwookie, this nation was founded on the idea of less government is better, the Lord of the fief is not feeding his slaves.

Philip,

Sorry. You’ve got it wrong. The English settlers rebelled because they were being taxed, but had no representation in parliament. It’s quite possible that the entire rebellion could have been staved off, had they been allowed the representation that they needed.

If you read the words written at the time, you see that rather than asking for less government, they were asking for responsible government. Which they still haven’t gotten. In the long term, the USA would probably have been better off remaining a British colony.