How To Create A Depression

Essentially all of the so-called “growth” since 1996 was in fact debt that was claimed to be growth!

This is exactly identical on a national scale to you borrowing more and more money over a period of more than ten years, spending it all, and claiming to be “enjoying unprecedented prosperity.”

As total debt rises so does total debt service and this presents an ever-growing drag on growth (GDP).

Adding to total debt through bailouts, which must add to total debt as we do not have the money in the United States and must borrow it, simply adds to the negative impact on GDP and thus the drag on the economy!

There is no escaping this reality whether the government (or private parties) like it or not. These are mathematical facts and not subject to political whim; Paulson and Bernanke, both of whom are highly intelligent, understand this.

[The Market Ticker]