Reagan’s Budget Director Agrees: Barnaby Was Right

26 May

h/t ZeroHedge

Former US President Ronald Reagan’s budget director, David Stockman, appears on Bloomberg TV to discuss the USA’s debt crisis, and says that a “technical default is now a virtual certainty“:

According to Stockman, both major political parties are implicitly pushing for a US default.  At the same time, thanks to their inability to reach a political compromise, each party is blaming each other for this inevitable outcome:

The real problem is the de facto policy of both parties is default. When the Republicans say no tax increases, they’re saying we want the U.S. government to default. Because there isn’t enough political will in this country to solve the problem even halfway on spending cuts. When the Democrats say you can’t touch Social Security, when you have Obama sponsoring a war budget for defense that is even bigger than Bush, then I say the policy of the White House is default as well…That is the question that really needs to be understood better and appraised by the bond market. Both parties are advocating default even as they point the finger at each other.

Add a former US budget director to the evergrowing list of those who now agree that Barnaby Was Right in 2009 when he warned about the risk of US debt default.

Take a moment to review Barnaby’s prescient warning (“Barnaby Warns Of Bigger GFC“).  A warning that cost him his job as Opposition Finance Spokesman, and now is deserving of a knee-scraping apology from the likes of Swan, former Treasury chief Ken Henry, “$1M Man” RBA Governor Glenn Stevens, and the rabid media pack who denounced Barnaby as an economic illiterate, when in fact he is more qualified to manage money than the entire Labor economic team put together.

Then, take a much longer moment to ponder Barnaby’s most recent warning.

That our government plans to steal your superannuation, to pay down spiralling government debt (“No Super For You!“, “Grand Theft Pēnsiō“, and “Grand Theft Pēnsiō – Europe’s ‘Economic Superstar’ Steals 5% Of Private Super Funds“).

One Response to “Reagan’s Budget Director Agrees: Barnaby Was Right”

  1. JMD May 26, 2011 at 7:58 am #

    Another very interesting article on ZH:

    And for what it’s worth, my comment:

    I was too young to take much notice at the time but based on my studies since, this is all very Asian Financial Crisis-esque. I noticed on the financial news last night that Asian markets are down big time & there is trouble on the docks here, very 1997-98. There was also much trouble in Central Asia at the time, coming out of some kind of EU debt crisis in the early-mid ’90’s.

    The big difference now is the USD itself is fraying at the edges. It would seem the stakes are far higher now.

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