Peter Schiff
LewRockwell.com
August 13, 2010
In a commentary about a month ago, I described how the economic world seemed to be drifting into two opposing camps: the Washington-based “Stimulators,” who insist that more government debt is the best means to end the financial crisis, and the Berlin- and London-based “Austerians,” who argue that debt is the crisis itself. If recent economic data and currency movements can be considered votes of confidence, then the Stimulators should be sweating. Moreover, these recent signals should provide economic analysts and investors with a road map for the future.
To start, the latest economic news for the US has been bleak. Although 2Q GDP figures show the economy to be “expanding” by 2.4%, the pace is little more than half the average rate over the previous two quarters. What’s worse, US debt levels are expanding faster than GDP.
As everyone with a credit card knows, it’s easy to expand spending if you charge it. But even this borrowed growth has failed to make a meaningful dent in persistent US unemployment. The just-released July payroll report shows the American economy shed another 131 thousand jobs, marking three full years of private sector layoffs.
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