Tuesday, July 27, 2010

The Latest from Rosie

Let's remind ourselves that the U.S. economy is still operating with a need to have jobless benefits extended for 99 weeks. This would make seasonal workers in Newfoundland blush. Here we are with a near-10% deficit/GDP ratio and a debt/GDP ratio a year away from hitting 100% – talk about a game-changer. Both the FT and the WSJ run with articles today highlighting the debate in the economics community over the effectiveness of U.S. fiscal policy.

What an indictment. This is an economy hanging on by tenterhooks because the Fed was supposed to have enough confidence in the economy to begin to stand on its own two feet so that the central bank's pregnant balance sheet was supposed to have been in the unwinding phase by now.

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