Deficits Deficits Deficits

U.S. Government under President George W. Bush's watch surely deserves the credit for forestalling a literal free fall in the financial markets (stock market as well as credit markets) during fall of 2008. No matter how imperfect measures they may have been deemed, $750 billion TARP program surely served its purpose. It reinstilled the confidence in the U.S. financial institutions as well as the financial markets, at least for the game to continue from a screeching halt.

Fast forward to spring and early summer of 2009. U.S. Government under the new regime of President Barack Obama is taking unprecedented steps of getting into ungodly amounts of deficits as far as the eyes can see. How can this all be justifiable? On the name of helping out the current dire situation, congress made the passage of$780 billion stimulus program. Who really needs all this stimuli? It seems like the government itself does.

So, where is the outrage among common people? Financial markets are already on the mend. Credit markets have been already thawed. They are not operating like a well-oiled machine due to obvious reasons of huge capital holes in the balance sheets of the financial institutions coupled with major economic weakness, though someone expecting them to operate like they did before the bust are having a wishful thinking. Those days are gone for ever. Credit is going to remain scarce for years to come...at least until the de-leveraging has run its course. There is no doubt about it. Stock markets are up significantly from their March 9 lows. So, clearly they have regained some lost footing. As a result, financial markets do not need any additional stimulus.

It appears that the trillion here or trillion there does not matter to the government anymore. It has planned annual deficit in the trillion dollar range for every year for next several years. A talk of trillion is so common these days that we can't even say that it amuses us. Who is going to pay for this? Ultimately, we all will, our children and grandchildren will.

The fact of U.S. being hailed as one of the best nations in the whole world, if not the best, may soon be the history. It was in the making for last three decades. What drove the country to this stage still continues; which is a disregard to a fiscal and monetary discipline. With the financial markets meltdown of 2008, we had a big hope that this may turn out to be a good inflection point for a better and brighter future. From there on, we could embark upon a journey with proper changes, that can lead us back into a solid financial footing. Now, it appears that the Government is squandering one of the biggest opportunities presented in generations. So, our hopes are dashed that the U.S. will regain its superpower status; instead it gradually will relinquish this crown to other nation(s) in the not so distant future.