Monday, August 8, 2011

More Nonsense from Politicians

Geithner is complaining about Standard and Poor. The G-7 says that they will take "concerted" action, whatever that means. The ECB says they will buy Spanish and Italian bonds. These folks still don't get it.

Politicians believe that all they need to do is "calm the waters." If that worked, it would have already worked. The world is drowning in sovereign debt. The US national debt is spiraling out of control. "Calming the waters" might get you through a day or two, but that is about it. Sooner or later the cold hard facts of the numbers intrudes.

The size of government needs to be reduced in the western economies and the entitlement programs need to be phased out. The western countries cannot afford these things anymore and bondholders won't fund them. All the discussion by Geithner, the G-7, and the ECB is irrelevant and distracting.