The magazine cover is somewhat polemic. Barron’s recent article on Obama concludes that hiking taxes alone won’t put the U.S. on a sustainable fiscal trajectory. Thus, the idea is that politicians embrace the upcoming sequester of spending cuts set to take effect March 1.

Here is from the article:

“In his State of the Union speech last Tuesday, President Obama concluded that “the State of our Union is stronger.” The big question is: stronger than what?

Federal debt is a record $12.2 trillion, or 76% of the nation’s annual output of goods and services. While that’s still well below Greece’s 153%, we’re headed steadily in the wrong direction.

According to estimates by the Congressional Budget Office, adjusted by Barron’s to account for recent tax increases and other factors, if the U.S. doesn’t raise taxes further and cut spending dramatically, the national debt could easily reach 153% of economic output by 2035.

These are not just numbers. If the U.S. national debt continues ballooning, we can be sure of a deep, long-lasting recession — very likely a depression — sometime in the next two to three decades. The unemployment rate could easily surge to 20%.”

But Mr. Barry Ritholtz has a good argument against the article:

Source: Barron’s

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3 Responses to Barron’s Cover Blasts Obama: “Follow me, we can be like Greece”

  1. zabiziz says:

    Greece just some years ago used to pay low interest rates and the fact of USA have its own currency and central bank can only help the politicians to print money and rise the inflation. In fact, that is exactly what the FED is doing. It’s actually funny how people think that the central banks can solve all problems just printing money…They think that the government is some kind of mystical institution that can increase debt forever and if something goes wrong, guess what, just print money, and everything it’s solved. This people probably also believes in Santa Claus.

  2. frank stein says:

    Barry is right. Inflation is very low in the USA. Energy costs are deflating. Balance of trade is improving with lowering of oil imports and increases in exports. The dollar may even appreciate over the next 10 years.

  3. zabiziz says:

    Please, explain how the dollar will appreciate with this increase of monetary base?

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