The Tragedy of Fiscal Conservatism? What Conservatism?
So long as the world has fools like Hugh Hendry running around, it will be that much more difficult to fix what is broken, namely fiscal and monetary policy. Hugh is doing the media rounds and commenting about how the United States is “rocking and rolling” and seems to have “found the right gear for fiscal policy”. Come again? Given that Hugh can’t string together a coherent thought, he drops phrases such as “the tragedy of fiscal conservatism” and then says nothing to support it.
Allow me to ask the question: What fiscal conservatism? The U.S. has run an aggregate fiscal deficit of approximately $9 trillion over the past 4 years. Approximately $0.62 of every $1.00 goes to one social program or another. The purchasing power of the Dollar has been greatly diminished as a result. Further, there is little if any “real” growth in the United States as CPI is woefully understated. The United States has zero fiscal restraint. This can’t end well.
The Fed is apparently concerned about this “rocking and rolling” U.S. economy as it started to ease policy yesterday as we wrote HERE.