Economics is quite simple really. Ask your mother who manages a home in the resources available to her. She has no problem in managing her home or saving a kitty for a rainy day. Irrespective of one’s position in the pecking order of financial freedom, the lady of the house always manages within her means.
Ben Bernanke (BB) thinks otherwise. He wants the eastern world to spend beyond their means to subsidise the imbalances caused by the western world. He says ‘progress can only be made to remove imbalances when Asians start saving ‘too little’ ’.
He wants every country to run a trillion dollar deficit. When every single country on the planet is precariously debt ridden (as bad as the US) the imbalances will wither away.
In the meanwhile he needs to learn a thing or two from a prudent homemaker.