When we look at the European situation, there has to be fiscal consolidation qualified by growth-intensive measures. In addition, there has to be increased recapitalization of the banks. Clearly, the two go together. The sovereign debt issue weighs on the confidence that market players have in European banks. [..]Oh my, here we go again. New face, same statist based dogma. Continue adding growth to the system which is overgrown. Debt needs to be added. Money from the national governments MUST be infused into the banks. The peoples that the governments represent will just have to deal with less.
The spectrum of policies available to the various governments and central banks is narrower because a lot of the ammunition was used in 2009. But if the various governments, international institutions and central banks work together, we'll avoid the recession.
The countries of the world are in the same condition as the people. They are getting older, with acquired tastes that cost too much and a debt level that it too high for continuing them. The "growth" that everyone wants to chase isn't organic, it is based upon borrowing more money to make more crap that people can go into debt to purchase. That horse has died, it is time to start beating it.
The world that we are heading into seems to be immune to the prescriptions of the past. The economy which feeds and shelters us is a political construct. It is not an organic lifeform with its own lifecycle. We are coming to the end of the Reagan/Freeman wet dream and are getting to the place where we have to come up with a new idea. The true believers that have profited and their sad screwed cousins who mouth the dogma in hope of crumbs for the table are winding up for one last sermon.
We are getting to the point where we have to make changes. It is like jumping into a lake from a high place. Hardly anyone just goes and does it, they take a while huffing and puffing and getting their nerve worked up.
I really think that the next couple of years are critical as to whether we will continue to survive as a going concern here in the old USA. The right is starting to trot out some pretty scary folks. When the best that they have to offer is a Mormon version of Gordon Gecko, we are in for some serious shit ahead.
Obama is the last Democrat who will be able to get himself elected the way that the past couple of (D) presidents have gotten elected (read here, lie your ass off during the campaign, then turn Republican as soon as you hit the White House). So I am thinking that either the 2012 or 2016 elections will see an actual choice between competing ideals or we will be over. Someone will come along to represent the populace and, if elected, will probably go the way of the Gracchi. The landed gentry will savagely defend their privileges, and whoever they elect will stand a decent chance of becoming Caesar.
It just depends.