Some financial leaders are finally speaking out about the dire situation the United States economy has found itself in. If you watch the news, however, you’d have no idea you’re on board a sinking ship thanks to the government’s massive debt and unrealistic deficits.
Former chairman of the Federal Reserve, Ben Bernanke, has even begun to sound the alarm on the government’s spending problem. At a recent round-table discussion with reporters at the Brookings Institution, Bernanke, former Treasury Secretaries Henry Paulson, and Timothy Geithner all expressed concerns that the next economic crisis will come with policymakers being unable to do anything about it.
Rational thinkers understand that the S is about to HTF when Bernanke shows concerns over government spending and major deficits. The former Fed chair “criticized the deficit-ballooning tax cuts and spending increases agreed to by President Donald Trump and Congress as ill-timed,” Bloomberg’s Rich Miller reported. “Bernanke noted that [the deficits] come as the country is at or near full employment. He also voiced concern about the longer-term consequences of rapidly rising government debt.” It’s long been touted by even more conservative economists that the government should have cut spending in accordance with cutting taxes.
Geithner then warned that deficits incurred during the Obama administration and into Trump’s tenure have been responsible for our next crisis. “I think the deficit fever of ’09 through ’13 was mistimed,” the former Treasury secretary said, according to USA Today. But Geithner didn’t say the government shouldn’t have stopped their spending spree, he simply noted that the high deficits served to reduce stimulus spending (bailouts of big companies) that might have helped speed the recovery. “I say the new complacency about the larger deficits is mistimed, too.”
Paulson, who was the Treasury secretary under President George W. Bush also took an ominous tone regarding the national debt. “If we don’t act, that is the most certain fiscal or economic crisis we will have. It will slowly strangle us.” Paulson also said that now, when the economy is growing, is the best time to address “some of the persistent structural issues that are going to determine our long-term economic competitiveness.” Those issues, he said, include the deficit, immigration, income disparities, and what automation and globalization are doing to American wages.
It comes as a bit of a surprise the infamous Keneysian economist Bernanke would express concerns over the government’s inability to decrease spending. But now that he has, will Americans heed the warning and protect themselves against the next financial crisis?
According to Financial Times, it is becoming clear that the global monetary policy is now caught in a debt trap of its own making. Continuing on the current monetary path is ineffective and increasingly dangerous. But any reversal also involves great risks. It stands to reason that the odds of another crisis blowing up continue to rise. –Ready Nutrition
“If we have learned one thing studying the history of disasters, it is this: those who are prepared have a better chance at survival than those who are not.” -Tess Pennington, author of The Prepper’s Blueprint