Wednesday, January 20, 2010

Economic Leadership

It is easy to lament the state of the economy. Debt rules households, corporations, and government at all levels. But for some reason, the power brokers who have created the vast corporate and government debt haven't been removed from power.

To borrow money and create a false sense of wealth is blatant dishonesty.

This is really a matter of leadership. But the difficulty is deciding who the leader is. Did the attitude of profligate spending start in Washington and households followed suit, or the other way around? Really, the twin debts are mutually reinforcing. And the solution is the same for households and the government. Stop spending more than you make. But that is a very unpopular solution for both.

Politicians or households would rather just have more income. That can work with households, but not so much with politicians. If politicians go for more income they either tax the economy to death or print money which causes inflation to murder the economy.

No comments: