The Government Bubble

1. First there was an internet bubble.
2. Second there was a housing bubble.
3. Third there was the commodity bubble.
4. Now we are in the government bubble.  

The fed loans out cheap money to banks at 0.5%.  They buy U.S Treasury notes at 2.0% and make the spread.  The logical question to ask is:  What happens when a government bubble bursts?  The mess will be so big that no none will be able to clean it up.  You see it is not just that the Federal Reserve will have to print money to plaster over the hole and keep people marching economically.  Everything will be so very out of place in the economy.  

This is why the people instinctively know it is better not to do bail outs.   In a thermodynamic like rule the bailout does more damage than good.

 As government borrowing rockets private borrowing falls off rapidly.

Want to try looking at it from a European perspective?

You lefties out there better realize that this government bubble is going to slow down innovation.  Including innovation in your ever annoying "green energy".