If you are interested in placing the current global economic crisis in perspective, I recommend reading This Time is Different by Ken Roggoff and Carmen Reinhart. I read it while I was in Nepal and it helped me understand the history of these crises. We've been careening from crisis to crisis for literally hundreds of years. The current crisis is rather acute and we will not emerge from it any time soon.
I watched the republican presidential debate last night. I was not inspired. I would really like to see our leaders, in both parties, begin having a candid conversation with the American people about how we can solve our economic problems ... unemployment, national debt, budget deficit.
The solution is really pretty straightforward. But it is not easy and not appealing. So, no one really wants to talk about it. The solution is really pretty straightforward. But it is not easy and not appealing. So, no one really wants to talk about it. I'm sure they calculate that, if they tell us the truth, they won't stand a chance of getting elected.
Here's what has to happen:
1. We need reduce our expenses AND
2. We need to increase our revenue.
3. We may need to sell some of our assets to pay down our debt
Simple. This is what I advise clients to do if they are struggling with debt or negative cash flow. Our government is no different.
By the way, the title of the book is a tease. This time is not different.
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