Bernanke Urges Deficit-Cutting, Scrutiny of Tax Code - WSJ.com

Bernanke Urges Deficit-Cutting, Scrutiny of Tax Code - WSJ.com:
"All the news about Europe, and especially southern Europe (Greece and Portugal the last few days), might give Americans some intimation about what happens when one combines too generous a public sector (e.g. US public employee unions) and too generous and expensive (read: high direct and indirect taxes) entitlement programs (e.g. Obamacare, current redistribution and social benefit programs in the US).

The end result is a slow-growing (at best) economy. Demand is continually supported by government borrowing and high taxes that discourage both hiring local employees (largely due to indirect taxes that employers pay on employment that the employee is hidden from seeing - because government wants people to think there is a 'free lunch') and expanding and starting businesses.

The Democrats will never see the need to support business if it means giving less to those they feel entitled to social support. The Republicans get side-tracked by the religious right and their medieval beliefs.

Bernanke is right to be worried. He'll be on the hot seat to keep interest rates down. But, as with the 1970's, it was a losing battle - because there is no free lunch and the pricing increases by materials suppliers show that even with demand at 50%, the costs are going up."