What goes up, must come down. Two wrongs don’t make a right. You can’t spend more than you earn forever.
Some truths are self-evident. Some consequences are inevitable. Even if the status quo allows us to indulge in a seeming alternative reality where basic rules of mathematics seem to no longer apply.
In the end, no person, household, company, or government can successfully survive if it requires a never-ending flow of borrowed money. Which seems downright unfair, given they are all encouraged to fully embrace hyper-indebtedness over the short, medium, and long-terms.
Take on as much corporate ZIRP debt as you possibly can, because all anyone cares about is your performance over the last 90 days anyway, and by the time that massive debt hoard becomes an issue, you'll be gone as CEO anyway.
Replace 'corporate ZIRP debt' with 'runaway deficit spending' and 'CEO' with 'president' and that essentially sums up the federal government, too.
Everyone likes the guy who pays the bar tab with an open credit card. How many friends stick around once the card stops working, once the bank cuts him off?
For the 29th week in a row, Americans rate of spending has increased at a higher rate than their incomes. So long as credit is easy and plentiful, no big deal. What happens when the next crisis locks up the credit markets, as each of the past two crises have? What do you do when your income...