This will be the most important political conflict of the medium term future.
Can we really balloon the deficit to $1 trillion and expect business as usual in 4 to 5 years given the precedents and given the low savings and high debt?
My answer is no. The U.S. economy cannot possibly work itself out of the greatest financial crisis in some 70-odd years in a mere 4 years and then expect to raise taxes on the middle class without a major recessionary relapse.
So, when you hear policy makers talking about reducing the deficit as soon as possible, what you should think is 1938 and continued depression.
