If something cannot go on forever, it will stop. Government spending has propped up the American economy for decades. Trump's tariffs are the beginning of the end. Let the pearl clutching begin.
Back when I started on the bond desk, in the early Precambrian era, if I recall correctly, I read that you could divide countries into 3 main groups. Group one was countries where government was less than 33% of GDP. Back then, that was Hong Kong, Switzerland and the US. They had 3% unemployment and +5% growth. Group two was countries where government was over 66% of GDP, countries like the PIIGS, where growth was negligible and unemployment in double digits. Group three was in the middle.
It’s not rocket surgery. The ancient Greeks said the best government is that which governs least. Lao Tzu advised the Emperor of China: “Ruling a big country is like cooking a very small fish. If you poke it too much, you’ll ruin it.” It’s been pretty much nothing but poke poke poke ever since, everywhere.
Back when I started on the bond desk, in the early Precambrian era, if I recall correctly, I read that you could divide countries into 3 main groups. Group one was countries where government was less than 33% of GDP. Back then, that was Hong Kong, Switzerland and the US. They had 3% unemployment and +5% growth. Group two was countries where government was over 66% of GDP, countries like the PIIGS, where growth was negligible and unemployment in double digits. Group three was in the middle.
It’s not rocket surgery. The ancient Greeks said the best government is that which governs least. Lao Tzu advised the Emperor of China: “Ruling a big country is like cooking a very small fish. If you poke it too much, you’ll ruin it.” It’s been pretty much nothing but poke poke poke ever since, everywhere.
On point !!
Krugman and the other Keynesians must have been clam happy during the Obama/Biden regimes.