Thursday, November 12, 2009

George Will's Worried About the Deficit (Could The OMB Learn Some Lessons From Gary O'Connell?)

George Will is worried about the ever-increasing deficit, and I am with him. In today's Post (here), Will complains about how much money the Federal Reserve is printing in its frantic effort to keep the economy going.

Will predicts inflation around the corner: "The U.S. government has a powerful incentive to try to use controlled inflation for the slow-motion repudiation of some of its mountain of new debt."

There are not that many pundits complaining about the deficit at the moment, and I can't quite figure out why.

353. Have all the commentators been cowed by Paul Krugman's repeated calls for more and more stimulus? Are they concerned that advocating belt-tightening while we are still in the recession would be considered irresponsible? Or is it actually the consensus of mainstream economists to keep printing money as fast as the Chinese and other countries will buy it?

If I think about long-term problems confronting the US right now, the biggest one is clearly climate change, and #2 is probably the threat of radical theologies. But third on the list could definitely be the possibility of the collapse of the dollar (and, with it, the American economy), once the Fed has to eventually pull the plug on cheap money.
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Interestingly, the City of Charlottesville continues to run a tight budgetary ship, as evidenced by the newly-announced fiscal 2009 surplus (!) -- Rachana Dixit's got the story in the Progress, here. Big props to whoever is running the City budget!

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