He's correct. At the current deficit levels, the US could give us all a year or two off of taxes and the difference would be negligible. Supposedly spending 85 billion a month worth of bad mortgage debt doesn't trickle down to the consumer where the money printing would "truly hurt" us, but of course it does. Don't see any inflation and therefore no danger due to deficit spending? Well real estate would be down 75 percent nationwide without it. The difference IS the inflation. The trouble is that we are debasing our currency at our creditors' expense. They will not all think alike and vote alike and a currency war will result.
How is this sustainable? There have been no "reforms"...that is a load of administration BS. Cutting back on some of the zero down, interest only, no doc required mortgage instruments hasn't effected the banks at all, because the Fed just buys up all of the bad deals - covering everyone's ass. Just how is an economic turnaround going to pay back the 85 billion per month that's been spent continuously over the past five years? How will the banks do business when the fed isn't covering all bad bets? Just how incredible a turn-around is required to send those banks back into self-sustaining mode? How long before someone proposes public access to investments that are currently being "guaranteed" by the Fed?
If any one of our creditor nations calls our bluff, the Fed could be screwed again without an emergency Congressional action.