How Best to Nurture Fragile Recovery? - WSJ.com

THE ECONOMIC CAMEL OF THE DEVELOPED WORLD: How Best to Nurture Fragile Recovery? - WSJ.com: "A well put article.

Somehow developed countries and liberals see no limits on 'public goods' (essentially welfare and income transfer programs).

From the perspective of a developing country that couldn't begin to imagine the largess of developed country liberals, such liberal benefits are unimaginable.

To liberals, they can only tax and borrow and tax and borrow.

Greece may be on the front burner right now for its unbridled largess with borrowing that has gone beyond markets willingness to forbear.

But, liberals don't realize that too much largess and too much borrowing eventually pull down the economy on which they have to rely for productivity and funding.

Throughout the developed world the last straw may have already been put on the proverbial economic camel's back. It may be we haven't gotten there and it may be that the camel just collapse slowly - trying its best to stay on its feet.

Early in April, the unemployment numbers in the US suggest the camel is still settling to the ground - no matter what type of fluff the pundits try to pander. Business can see nothing but taxes and more entitlements on the horizon. This is not the horizon of dawn but of dusk.

4% 10-year Treasury rates still seem reasonable in an historic context; but, there is also an historic context where heavy government borrowing crowds out private borrowing (the early 1980's for example) and rates go way up. Will Bernanke print money to try and hold down rates? Or, will government find a way to spend less or tax a lot more?

Questions like the above certainly discourage business investment."