Wednesday, August 22, 2012

The New Depression: Potential Solutions To Wean Off A Credit Based Economy

Richard Duncan spoke with Squawk Box this week on CNBC. It is no secret here that he is one of my favorite economists, not necessarily because I agree with all his ideas on how to help the economy, but because he has a true understanding of how the global economy works and can provide an intelligent discussion on the issue.

After understanding how the United States economy reached this critical point (growing debt from $1 trillion in 1971 to over $50 trillion in 2008), you can begin to get a firm understanding of where the economy will go from here. As I have stated numerous times in the past, there is not going to be an easy way to fix the current problem. The past four decades have borrowed prosperity from the future and now the bill is here waiting.

The following is Duncan's strategy for growth and how we can wean off this current government/credit addiction. The problem, which is not discussed, is that true long term growth strategies will never be discussed ahead of short term stimulus and transfer payments that purchase short term votes. But that is another topic for another day.


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