The prediction that the Global Financial Crisis will end in 2011-12, and that the economy will then experience above-trend growth of 4.5 percent a year for at least two years is the big intellectual flaw in the budget.
That prediction is based on the assumption that the economy will always return to 3 percent growth after any short term disturbance.
The Treasury’s one concession was to add an additional year where growth was expected to be below average–so rather than forecasting 3% growth in 2010-11 as it would normally do, it assumed growth of 2.5% for that year. But it then assumes growth of 4.5%.
But with american dollar deficits baked in the cake and with inflation just getting warmed up I expect the bills will be paid by way of massive inflation as part of a general final crack up boom.
If thats the case, and seeing that governments everywhere are buying their own bonds with freshly printed money, that that seems likely, then maybe spending like crazy because everybody else is the most rational response to the crisis.
Better buy some gold and silver with the stimulus money, I guess and get ready for the final crack up boom before war again realigns reality with the existing international monetary order.
http://dharmajoint.blogspot.com/2009/05/when-interests-collide.html
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