It’s going to pop. It’s not just going to inflate forever. When it pops and how it pops are open questions, and I will grant you that saying a Keynesian bubble will pop is kind of like saying sooner or later the sun will set. But it’s pretty amazing how we humans are able to forget or ignore something which we KNOW is going to happen. The sun will set. The easy money bubble(s) will pop, and this time it will be bigger than anything humanity has ever seen.
Of course many will blame “capitalism” when things go bad again. But the reason the world economy will find itself back on the rocks will be because of government intervention, politburo meddling, experts in capitals succumbing to hubris – as they ALWAYS do, not free market capitalism.
Seriously, why can’t we evolve beyond this Keynesian backwardness and embrace free and open markets at this point? If we don’t massive dislocation is only a matter of time. We simply don’t have the luxury of indulging the Keynesian cultists any longer.
(From The Daily Caller)
As citizens watch their home values, IRAs, and 401(k)s plunge and a new wave of recession and unemployment ensues, populist demagogues will take to the airwaves demanding action on behalf of the “forgotten man,” while deriding businessmen, innovators, and entrepreneurs — who are the only real source of economic growth — as “malefactors of great wealth.” Before long, the next great call for politicians to “Do Something!” will reach a fever pitch.
It has all happened before, so odds are it will all happen again — unless enough believers of the prosperity illusion finally change their minds and conclude that ill-advised economic interventions by an all-powerful government are the source of our problems, not the solution. Failing that, the cycle will repeat itself, with ever more violent swings, pushing democracy toward a tipping point.