Not forever, to be sure. There are those, like the analysts at Charles Schwab, who think that inflation and a weak US dollar are only long-term problems. But Allan Meltzer thinks the dominoes are being lined up for a colossal problem in the not-so-long term. Meltzer is no idiot -- he's the author of "A History of the Federal Reserve" and an economist who's been speaking up about the potential inflation catastrophe ahead for some time. And here's just a single metric that ought to make the problem a little more clear: The US government has built up a Federal debt of $12 trillion. The World Bank estimates that the entire world economy is worth about $57 trillion a year. So, somehow, the US needs to figure out how to get control of a debt burden that's not only just shy of its own annual income, but also one that's presently more than 20% of the entire global economy -- and growing by more than a trillion dollars a year. There is, in short, only so much money in the world to begin with, and if we're siphoning off an annual deficit that's bigger than all but the top ten world economies, who's going to be available to do the lending? The borrowing has to stop before expensive assets have to be put up as collateral -- as is starting to happen in Britain, where a bankrupt automotive firm has been sold to a Chinese group. But America may be too busy making celebrities out of reality-television actors to notice.
By introducing a "public option" for property insurance in a state where massive property damage is a regular occurrence (thanks to hurricanes), the state of Florida is sitting on a financial time bomb that could absolutely destroy the state's economy and render its government bankrupt overnight. Food for thought in a country whose lower house of the legislature has just passed a huge "public option" for health insurance. In related news, the government of Venezuela, which has promised much and paid for little, is in the midst of taking hotels and other property on a whim.
Should politicians regulate what's on TV? Can city and county governments save money by merging? What's the best way to control big business? These and seven other big answers are answered inside.
