The Baltimore riots have once again shown the issues facing the liberal ideology thus unleashing a torrent of excuses from leftist journalist.
Into the fray steps one Barrack Obama with, as is his wont, a brilliant and original idea that the solution is “… to get massive investments in urban communities,”. No matter what the problem is, the solution is always the same, more government spending. And this in a city run by Democrats since 1967.
Is he aware that the 2015 US budget calls for a total expenditure of $3.90 trillion with a deficit of $564 billion thus putting the US debt at 102.6% of GDP, according to the same Wikipedia page? If total expenditure of 21.4% of GDP isn’t enough, then what is?
The authors had already drawn on two centuries of public-debt data for their seminal 2009 financial history, “This Time is Different”. In their paper Ms Reinhart and Mr Rogoff sorted the figures into four categories of indebtedness and took average growth rates for each. They found that public debt has little effect on growth rates until debt reaches 90% of GDP. Growth rates then drop sharply. Over the entire two-century sample (from 1790 to 2009), average growth sinks from more than 3% a year to just 1.7% once debt rises above the critical level.
Is there a solution? Yes, but…
In a moment of unusual candor, Prime Minister of Luxembourg and Head of the Euro-Group Jean-Claude Junker stated: “We all know what to do, we just don’t know how to get re-elected after we have done it.”