@AmCan 186103 wrote:
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.
on the other hand, as far as i’m aware, US has the worst outstanding debt out of all countries in the world. i think that while the current Brenton Woods agreement remains in force and de facto keeps USD as the “reserve currency” around the world, US will be safe. Now if that would change (france, and several other industrialised countries are calling for a change)…US would be literally fucked as nobody would be interested in dollars nor American debt.
i guess that’s one side of the story. regardless of the truth, and actual cause and effect, the science (its actually art) of economics has been severely discredited over this financial crisis. makes you wonder how the vast majority of economists never “saw it coming”. i mean, if economics is your speciality, you should’ve seen that the world is doomed and done something about it, no? usually the same is expected of other professions…
i did my bachelors degree in economics and found it overwhelmingly bogus. some of the reasons were related to the fact that economists couldn’t predict the future (not in a crystal ball kind of way, but based on circumstances), they always had a 50/50 split in opinion (physics, chemistry, biology can). they could only gather data from the past to support their theory. and even then, they only chose data that validated their theories.
so yea, me thinks that economists are overrated!