MoneyMorning.com is reporting that other mainstream economists are coming to similar conclusions. Laurence Kotlikoff, a former member of President Reagan’s Council of Economic Advisers estimates the true fiscal gap is $211 trillion when unfunded entitlements like Social Security and Medicare are included.
Duncan added, “Private sector debt has already started to contract a little bit, and if it were not for these trillion-dollar budget deficits by the U.S. and most other governments, topped up by a whole lot of paper money creation, we would have already spiraled into a new Great Depression.”
It seems Duncan is advocating for and against government spending and inflation. He argues, “many people who agree with the Austrians believe we should just now take our medicine and allow the system to adjust. But I don’t think they realize how harsh the medicine would be.” He adds that slashing government spending would immediately lead to a new depression. Duncan concludes, “We can take advantage of this opportunity and borrow and invest at 1.5 percent interest or we can collapse into a depression. Those are our options. Be imaginative and brave or fail because of our past mistakes.”
I like his proposal to “be imaginative and brave” and believe that we should learn from past mistakes. However, I do not believe that more government spending will solve the problems caused by government spending. Duncan’s approach seems akin to a doctor telling a bleeding patient “in order to stop the bleeding, we must make another cut.”
Whether Duncan is right or wrong about how to proceed, the economy will eventually collapse. The question is not “How do we stop it?” The question is “Are you prepared?”
When the economy collapses, everyone will need to know how to barter, hunt, gather, grow and store food and water. I know I’m not ready for the collapse, but I’m preparing. Are you?