The Government's Effort Has Failed

09-09-2009 • The Market Ticker

The Federal Reserve's latest (through July) G19 update is out, showing consumer credit. To say that these figures are ugly would be an understatement. In fact, there is simply no way you can spin this - while this contraction in credit has to happen it has horrifying implications if our Washington policymakers don't get on the stick and deal with the underlying issues here and now instead of pretending that everything is ok or worse, try to "borrow our way to prosperity." Now let's add to the misery: The Social Security Trust Fund reported an August net deficit of $5.865 Billion. This is the largest monthly deficit in nineteen years. The problem here is twofold - the long-term financial shortfall for Social Security sounds awful, and it is. But its a "kick the can and turn your head" thing and has been for more than 20 years. This problem is more acute - the long-term deficit incurred by the $6 billion that had to be borrowed is some $17