Dead Men Walking by Floy Lilley

From the outstanding LewRockwell.com:

Pull the plugs.  Let the dead men be buried. Trying to keep insolvent bad deals alive uses all the scarce resources that newborn good deals need. This produces staggering costs of lost opportunity. Like Japan, we might not recover for a very long time if we think we can keep dead men walking. Let necessary liquidation happen. Recession is the mandatory painful reality of clearing markets in order to regain a recovering economy. Booms and busts will happen as long as the money system we have in place is such an unsound one.

But, within the reality of the money system we do have, happy days can not be here again by propping up the corpses of all the bad stuff that was birthed by reckless Federal policy. Greenspan and Bernanke deliberately drove interest rates from 6% to 1% and deliberately reduced the purchasing power of each unit of money by flooding the money supply by a 9% increase. It was boom time. Credit was thrown at everybody. Debt was the name of Nirvana, while savings were taxed. Everyone was high on a wealth effect that came from the effervescent bubbles. Our homes became our ATM machines. We were never as rich as the boom times led any of us to believe.

Don’t adopt the corpses through bailout deals. They will not revive. Ever. Bury them properly through liquidation. Return them to dust. Hunker down. Stop spending beyond means. Save.

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