The U.S economy today is desperately running in place – it’s neither in the economic freefall of late 2008 and early 2009, nor finding the footing for the rapid acceleration of growth predicted. It’s merely racing to keep from getting worse, held and fed by an addiction to Washington policy.
The drugs of choice to keep the U.S. economy going is long: the financial rescue; bailouts of an insurance giant and two auto companies; two rounds of fiscal stimulus – one large, one small; too many rounds of housing programs to count, with two more housing initiatives coming this week; rescues of Fannie Mae and Freddie Mac; cash for clunkers, cash for houses, cash for states, cash for food, cash for education, cash for students, cash for families with children, cash for small businesses, cash for work, cash for not working, cash for energy conservation, cash for counting energy conservation, and cash for counting all the cash that’s being doled out. The Fed has sold cash, lent cash, and created cash. The Fed has promised to keep cash available for a long, long time, and outlined new ways to create more cash in the future, if needed.