Update: We have published The Great Derangement - October 1, 2020 Newsletter !
The Great Derangement
Many mainstream economists currently argue that we shouldn’t worry about rising debts and instead focus on supporting the economy in any way we can. These are the same economists who told us not to worry about debt for the last thirty years as the Federal Reserve recklessly printed money, cut interest rates to zero, and engaged in massive quantitative easing leading to diminishing productivity, slower growth, extreme wealth inequality and toxic moral hazard. Their advice could not be more misguided today. Economics is one of many fields where we cling to discredited ideas, but it is particularly disheartening to hear such destructive long-term policies promoted today. Then again, we often see some of our worst thinking emerge during crises as our poor response to the pandemic illustrates. Excessive debt is without exception negative for any economy, and the evidence that America’s insatiable appetite for debt is slowly suffocating growth, productivity, initiative and equality is irrefutable.