WITHIN THE billions of sentences about the financial bailout there
is one word notably absent, austerity. All talk is of payments,
supports, subsidies, incurring more debt, stimulus packages. The thesis
seems to be: If only we spend more the party can go on. True, only if
the financial meltdown is a temporary mismatch and dislocation in
housing and credit markets. But suppose there is something
fundamentally wrong with the US economy. Then spending more will not
fix it. Getting the diagnosis right means getting the treatment right.
It may save us a trillion or two.
The subprime collapse is one symptom of years of little regulation, under-taxing, overspending, and massive debt.
On NBC's Meet the Press Sunday, Treasury Secretary Henry Paulson voiced confidence in the long term fundamentals of the U.S. economy. According to Reuters:
Asked about the fundamentals of the U.S. economy, Paulson said,
"I won't bet against the American people ... We will work through this."
John McCain has taken quite a beating from the Left and its captive media for saying essentially the same thing:
"My opponents may disagree, but those fundamentals, the American
worker and their innovation, their entrepreneurship, the small
business, those are the fundamentals of America and I think they’re
Nice to know that Paulson has McCain's six convered...