By John Tamny
SOCIALISM, NOT DEBT, CAUSES
ECONOMIC COLLAPSE “An inflation always creates winners and losers, redistributing wealth.” Robert L. Bartley, The Seven Fat Years
In 1819, England’s debt-to-GDP ratio reached 261%. Think about this number for a moment. And in particular, think about it through the prism of accepted economic wisdom today... It’s a reminder that when we focus on debt and deficits, we’re very distracted. It’s what we’re not thinking about that threatens us.
As an example of thinking the wrong things about debt and deficit, take Carmen Reinhart and Kenneth Rogoff, authors of This Time Is Different (which is the “Bible” of sorts for the debt- and deficit-obsessed)... According to their analysis, England’s gargantuan debt signaled looming economic and currency collapse for the global power. They claim that countries tend to tip toward decline once their debt/GDP ratios pass over the 100% line. England was, I repeat, at 261% .
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American Consequences
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