© iStockphoto/The Fiscal Times
© J. Emilio Flores/Corbis
Let's see. In the case of the US, real economic growth has been faltering since the year 2000. During the last 14 years real GDP growth has averaged 1.8% per annum - the lowest rate of growth for an equivalent period in modern times. In fact, it is barely half the average growth rate during the second half of the 20th century."The real economy needs money printing, yes, but money spending more so, and that must come from the fiscal side - from the dreaded government side - where deficits are anathema and balanced budgets are increasingly in vogue," he writes.
Not only is there no correlation between fiscal deficits and economic growth over those 50 years, but the real evidence is more nearly the opposite. During the the golden era of sound money and fiscal rectitude between 1953 and 1963, for example, real economic growth averaged 4.0% per annum. And that was achieved during a period in which the budget deficit averaged only 1% of GDP - with Washington actually recording surpluses during much of the Eisenhower presidency.
It might also be noted that during this same period, the inflation rate averaged only 1.2% annually - far lower than today's phony 2% target peddled by the Fed. Except no one called it deflation. Nor did they wring their hands about impending economic doom because the dollar's purchasing power was not shrinking fast enough.
Comment: Gross is tooting the PTB's horn of course. "Don't worry, everything will be fine. We have the solutions to the problems." Needless to say who created the problems in the first place. The PTB are desperate to keep the fake economy going but will fantastically fail.