How Goes The War?

Alan Blinder does a nice job of describing the economic crisis at a high level. He describes the government’s actions as a war – a war on two fronts. So how goes the war?

A guest post at Naked Capitalism is pretty pessimistic. According to Mr. Durden, the bad debt which has fueled the crisis will continue to keep showing up. If the government keeps borrowing to cover the debt, we will plunge into an abyss. That certainly doesn’t sound good! Even Mr. Durden is unable to say what will happen then.

Whatever happens, I guess we will see some kind of massive upheaval. We have enjoyed the benefits of artificial prosperity driven by unsound debt. We will also get to experience the hangover. This has happened before and will probably happen again.

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