Monday, May 16, 2011

Discussion about how the gold bubble might end

Mickey's arguments seem pretty ship shape.  But the thing that really grabs you is the rate of growth of spending.  Look at this chart:
http://www.kitco.com/ind/Mickey/may162011.html
In just one decade, government spending has grown from 1.8 trillion to 3.7 trillion- more than doubled.  Since the deficit is large now, and the government was running a surplus in 2000, what conclusion can you draw from this?  Only one- that government spending has grown much faster than revenues.   A question- how fast has the economy grown?  Did it double it's size in the last decade?  Something tells me that with 2 recessions- this didn't occur.  Observation number 2: government spending has grown much faster than the economy.  The conclusion follows: we have a large deficit because of over spending- not lack of revenues.

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