A Deficit of Leadership

While Democrats and Republicans argue over how to rearrange the deck chairs, the Titanic continues to sink.  I've included links to three articles that put the debate in perspective.

Keynesianism has Failed. The Monetarists are Proven Wrong

The Fed has extended the banks trillions of dollars in easy money, but this hasn't produced a commensurate expansion of lending. Why not?

The Great Recession demonstrates that the money supply is not the ultimate driver of the economy. The ultimate driver is very simple: has the government created a safe climate for investment? (RCM - Tracinski)

Dodd-Frank: Creating Chaos out of Order

The federal government has sown chaos and uncertainty in the markets. Nobody understands Dodd-Frank.  Not the congressional dimbulbs who voted for it, not the regulators, nor the regulated. It is a blank check for government caprice and regulatory whimsy, creating a regulatory free-fire zone where bureaucrats run rampant.  Would you put your money in a game where the rules were murky and subject to reinterpretation?

The Obama administration and the Democratic Congress have [...] created a hostile climate for investment, and they have done so through one measure that is directly smothering the economic recovery: the Dodd-Frank financial reform bill. Dodd-Frank has injected a lethal dose of uncertainty into the very heart of the financial sector--and we're only halfway through the worst of this effect. (RCM - Tracinski)

Tracinski explains how this flies in the face of the concept of the rule of law, which is a cornerstone of successful markets: Making clear laws understood by all and applicable to all.

Washington, We Have a Spending Problem

Ed Morrisy explains (text and chart are from Hot Air):

... look what happened to federal revenue after the much-maligned Bush tax cuts took full effect in 2003.  Economic activity expanded rapidly — and so did federal revenues.  In fact, the economy during that period boomed, and receipts from both personal and corporate taxes peaked as a result.  The Bush tax rates, as they are properly called today, did not create a revenue vacuum; they helped produce an expansion that enhanced rather than lost revenue.

While revenues have tripled during this period, federal spending has more than quintupled.  

It’s Later than We Think

And as if you didn't have enough to worry about, James Pethokoukis explains why the debt crisis is actually much scarier than we realize. Current projections are based upon rosy government scenarios.  Those of us who live in the real world know life is more thorns than roses.  As interest rates rise (and this is inevitable), interest payments will consume us. Go read it all here: Pethokoukis – Debt Crisis Fast Track