Forgive me if i’ve posted this before.
On Sunday i saw Fahreed Zahkaria of Newsweek on CNN. He argued that the US (obama) can and should spend as much as they need/want to fix the current problems. His point was that all industrial countries, in Europe, Asia and even Middle East Oil countries will all be adding on so much debt that there really isn’t a disadvantage to the US running up huge debts.
Basically the reality is that for the next 30 years most of the world governments will have huge debts and that the reality is that investors will just accept that as a given. Now my buddy who was working on his PhD in Economics at one point, was saying that Keynes felt the same way, that debt is really only an issue relative your competition. If the EU countries, japan, russia, Australia, etc. are all deeply in debt then we’re all competing on the same field.
Now i would still argue that we shouldn’t overdue it, but probably should only consider bailouts in cases where large numbers of jobs or important technical abilities may be lost