George Soros gave this speech at Columbia University on October 5. 2010 warning about the deflationary perils of austerity and speculating about what governments should be doing instead. See if you can tell where the markets are headed (and buckle up for safety!)
As you know I have written several books which serve to explain the crash of 2008. Two years have elapsed since then – it is time to bring the story up to date. That is what I propose to do today.
The upcoming midterm elections are looming large over the Obama administration. In just two months’ time, voters’ discontent will reshape the Congress and alter the power structure in Washington for at least the next two years.
Many voters are very unhappy with how things are shaping up. Especially the economy is on everybody’s mind. 9.6% is the official unemployment rate but as many as about one in five Americans barely make ends meet, because they are either unemployed, underemployed, no longer counted as such because they gave up searching, or just barely eke out a living on food stamps (it’s too much of a handout to die on but too little to truly call it a hand up).
The latter is of real concern, because these 40 million Americans are merely kept from starving with food stamps and the longer they have to rely on government assistance (and thus burden everyone else) the less likely they are to be re-integrated into the job market. Ever. Without expensive re-training measures (again, to be paid by the government), many of the long-term unemployed aren’t likely to find a paying job anytime soon.
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