David Stockman: Washington Has Created 'Sundown in America'

Wednesday, 09 Oct 2013 08:13 AM

By John Morgan

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David Stockman, the former budget director under President Reagan who often rails against towering fiscal irresponsibility in Washington, calls the nation's current economic situation "Sundown in America."

"It marks the arrival of a dystopic 'new normal' where historic notions of perpetual progress and robust economic growth no longer pertain," he explained. "Even more crucially, these baleful realities are being dangerously obfuscated by the ideological nostrums of both Left and Right."

In a recent speech at Harvard University, Stockman offered an apocalyptic view of the future as wrought by successive government leaders — both Democrats and Republicans — who have repeatedly compounded the problems of their predecessors with more bad decisions.

Editor’s Note:
Opinion: Retirees to Be Hit With Social Security Cuts

The villains in Stockman's view are "the warfare state, the welfare state and the central bank," Zerohedge reported.

The victims are the vast majority of Americans who have "experienced stagnant living standards rising job insecurity, failure to accumulate any material savings, rapidly approaching old age and the certainty of a Hobbesian future where, inexorably, taxes will rise and social benefits will be cut."

Stockman said both parties pay lip service to fixing the remnants of the United States' capitalist economy, but that "what is failing is the American state itself."

"One week Washington proposes to bomb a nation that can't possibly harm us and the next week it floods Wall Street speculators, who can't possibly help us, with continued flows of maniacal monetary stimulus," he stated, according to Zerohedge.

"Meanwhile, the White House pompously eschews the first responsibility of government — that is, to make an honest budget, which is the essence of what the Tea Party is demanding in return for yet another debilitating increase in the national debt."

The $2.5 trillion in quantitative easing (QE) by the Federal Reserve has done nothing for the Main Street economy or jobs in America. Instead, government monetary policy has accomplished only the "massive and continuous transfer of income and wealth" from the rest of the nation to the wealthiest 1 percent, Stockman explained.

"If this sounds like the next best thing to legalized bank robbery, it is," he said.

According to Stockman, the 2008 financial crisis was a "violent mark-down of hugely leveraged, multi-trillion Wall Street balance sheets that were loaded with toxic securities" and should have been allowed to run its course instead of impoverishing many innocent Americans.

Instead, Washington set the stage with QE for real collapse of the financial markets, he argued.

"Likewise, the Federal budget has become a doomsday machine because the processes of fiscal governance are paralyzed and broken. There will be recurrent debt ceiling and shutdown crises like the carnage scheduled for next week, as far as the eye can see."

Meanwhile, the government shutdown entered its second week Monday.

Politico reported that in a White House meeting last week, House Speaker John Boehner, R-Ohio, floated the idea of a "grand bargain" with Democrats and the White House that would include a spending bill, a debt limit increase and other fiscal compromises.

According to a knowledgeable Democratic aide, "everybody laughed at him because they've heard this song and dance so many times before," according to Politico.

Editor’s Note: Opinion: Retirees to Be Hit With Social Security Cuts

Related Stories:

David Stockman: 'Fiscal Crisis Coming Down Road'

Economist Wesbury: Talk of Default a 'Scare Tactic'

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