I guess he thinks the coming fiscal spending will close the output gap…
Cash Crunch Will Force Governments to Do Less
By Gerald F. Seib
April 9 (WSJ)
In a speech in Dallas, Mr. Bernanke bluntly noted that two giant fiscal waves were headed for the federal government, one atop the other. First comes the big deficit caused by the economic downturn. That will be followed immediately by ballooning costs for baby-boom retirees drawing Social Security and Medicare funds. “To avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above,” Mr. Bernanke
The last gasp of Reaganism/Thatcherism? Taken to its logical conclusion, the result will be the mother of all depressions, especially in this environment of debt deflation at the tail of a financial cycle dominated by Ponzi finance in Minsky’s sense.
People, including threatened politicians, are soon going to be searching for an alternative. MMT to the rescue! It’s a great time to be running for office, Warren. Thanks for getting the message out there publicly.
thanks for helping!