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The Decisive Question Is: Who Will Push the Reset Button?[/b]

[Linked Image from rt.com]

[b]We are currently seeing the “growth through low interest rates and high debt” economic model fail. It looks as if it will be an expensive “restart.”

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Astonishingly, U.S. economic experts often respond to the question of how the world’s largest economy will find its way out of its debt trap with, “Muddling through.” With that, they do not mean relevant management theory (don’t laugh, it really exists), but rather a true muddling through. Have fun with that....
The United States has a debt ratio of around 100 percent of the GDP. Above all though: Only roughly 56 percent of government expenditures are currently covered by tax income....
Sorry: An economic austerity program that merely proposes debt reduction will unfortunately be too small. To get to a tolerable 60 percent of the GDP (that would be the famous Maastricht criterion), the U.S. would need to reach primary budget surpluses of 10 percent of the GDP until 2020. That means income would have to exceed expenditures (minus interest payments) by roughly $1.4 trillion. Every year. Does anyone believe that? Above all, does anyone believe this will succeed with muddling through?
The U.S. is rapidly approaching the path where many euro countries already stand: behind the debt limit with no return....That’s not how one heals patients. At the beginning there is normally a proper diagnosis without self-deception. And it is: We are watching the “growth through low interest rates and high government debt” economic model fail. The debt is climbing higher and higher and growth is becoming slower and slower. The recognition that economic stimulus no longer functions above a certain debt level is, of course (at least officially), not yet political mainstream....
Without a restart, it will work neither in the U.S. nor in Europe. The question is who will push the button for the debt restart. And what this looks like. Several possibilities are open: simple cancellation of debt (improbable because of the potential for political conflict), currency reform (likewise improbable) and “inflationing” away government debt (very probable), to name only the most important.

The last might be the most charming for those in power; that is, if hyperinflation doesn’t get out of control, those asked to the cash register...will not truly realize their dispossession.