Obama's inauguration speech yesterday makes it pretty clear. He has no intention of discussing ways to lower the deficit and begin to tackle our national debt problems. Quite the reverse! Obama has more spending, taxing and regulating plans ahead for the next four years. As if the economy wasn't bad enough, Obama is planning more anti-capitalism moves.
You wonder if his advisers have any idea what the implications are for the economy of all of this. There was always the chance that a Republican House would block the most extreme measures, but that is becoming increasingly unlikely as Republicans tack feverishly in Obama's political direction.
Given Europe's situation, which is far, far worse than the pundits are saying, the economic outlook for the US is pretty bleak. The best that can be hoped for is more slow growth and stagnant employment. That is the very best that one can hope for! The worst is that the economy could begin to slip into recession mode. While pundits think Europe is doing better, the truth is that, compared to two years ago, the European economies are much, much weaker, the level of sovereign debt in Europe is much, much higher, and what little restraint on spending and regulation has lost its political support. Europe is doomed.
The real question is whether capitalism in the US is doomed as well. It may well be.