Wednesday, April 1, 2009

We Can't Borrow What Hasn't Been Produced

Frank Shostak explains here a fundamental economic truth that BHO and his economic advisers refuse to acknowledge.

By the way, Geithner, Bernanke, Summers, and Romer are all smart people. They understand that we can't borrow what hasn't been produced and saved. So why are they saying otherwise? I am led to the conclusion that these smart folks are dissembling because BHO wants them to, and he's their boss.

Removing non-performing loans from banks' balance sheets will not return the economy to growth. But it will redistribute the losses that have already occurred due to the rotten loans the banks and other financial institutions made using money created by the Fed. It will also speed America farther down the road of command and control from the 545.

Sadly enough, according to BHO's actions, manifested through Geithner and Bernanke, the wealthy should be and will be spared the consequences of their wretched decision making. And we who had nothing to do with the whole affair will be made to bear the costs. Never mind what BHO says; examine what he does.

Do you think BHO understands that we cannot borrow what has not yet been produced and saved? If he doesn't, he's not bright enough to lead us; if he does and says otherwise, ... well, you can finish the sentence.

Change we can believe in, right? No ... more like business as usual. Concentrated benefits and widely dispersed costs. That's the way of the 545 who would control your life.

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