Cheat Sheet

Given that unbridled borrowing got the United States economy into this mess, the government’s solution—“Spend without limit. Print money today, fret about the consequences tomorrow,” as today’s New York Times puts it—may seem a little off. Foreign investors may start to worry about the Treasury’s ability to cover its debt and stop depositing their savings there, which “would force the Treasury to pay higher returns to find takers for its debt, increasing interest rates for home- and auto-buyers, for businesses and credit-card holders.” Bailouts only delay the inevitable, according to some economists. “Our standard of living must decline to reflect years of reckless consumption and the disintegration of our industrial base,” says one. “Only by swallowing this tough medicine now will our sick economy ever recover.” Lest that opinion have you fearful, “most economists cast such thinking as recklessly extreme, akin to putting an obese person on a painful diet in the name of long-term health just as they are fighting off a potentially lethal infection.”