…I take notice:
The implication, however, is that a massive and sudden contraction of the European banking system would have the effect of automatically contracting credit conditions in the United States. If European credit markets tightened, the dollars held by European banks would suddenly become much less available as the basis for lending to American financial intermediaries and, ultimately, firms and households.
As George Mason University economist Tyler Cowen put it “if true, we are doomed.”
I think Obama can be legitimately criticized for not giving enough shrift to his Deficit Reduction Commission but I put the blame more on Republicans who have been frozen into inaction by the likes of Grover Norquist. Whatever happens after the 2112 election we better hope that the predicted financial collapse holds off long before that because this Congress shows little appetite for fixing things. I think the Lindstrom cartoon in today’s News Trib says it all. Wish I could link to it. It shows a GOP elephant being led on a chain held by Grover Norquist away from the voters.