The Bright Side Hides a Darker Reality - WSJ.com

LURKING QUESTIONS: The Bright Side Hides a Darker Reality - WSJ.com

It would certainly seem to be an open question as to how all of this over-lending to and over-borrowing by governments (and, lets be honest, their social welfare systems) will work out.

The money that could have gone into new productive capacity, technologies, better education, etc. has instead gone to overly generous benefits to public employees, retirees and those who never work.

At some point, there has to be a limit as to how much money there is. We all know Bernanke is printing money and the ECB is buying government debt that no one else will buy.

But government is hard put to cut back enough.

So what will it be: More printing to meet the needs of all these governments (the US of course included - both federal and state)?

Luckily the Chinese are still supply goods at low prices.

There doesn't seem to be any ability of government to cut back on expenditures without raising taxes. And, all tax increases effectively diminish the investment needed for economic growth.

China, etc. is moving up the technological sophistication scale in a society that consumes less and much less is given to non-producers.

Europe and the US are relatively blind to the need to aggressively increase the level of investment and of education (see U. of Chicago Rajthan? on education).