Still no answer to the main question grabbing the attention of governments throughout the world, which is the better route to economic recovery, austerity or deficit spending?   The European Union has been following an austerity path while the USA has been pursuing deficit spending.  Well the results now are that both sides are experiencing exploding stock markets and both sides are seeing government deficits diminishing.  The difference lies in unemployment statistics.  Most of the EU members are suffering record unemployment rates with 25% and more not unusual.  The main exception is Germany, the largest economy in the EU, where unemployment is still less than 6%.

The major new element is the sequestration that has reduced USA Federal spending.  This goes directly contrary to the deficit spending policy of the last four years.   However, in spite of the reduced federal spending the US economy continues to plod along on a path to a brighter future.  So who is to say we would not have done the same if we had not used deficit spending, maybe the system just automatically self corrects.

The fascinating event is our raging stock markets that are all hitting new highs.   Whatever has happened, the one percent is still doing much better than the middle class throughout the world.

As I have said before it is long past time to more closely examine the policies used until now since there is no clear demonstration that one is better than the other.   Meanwhile my bet on how the US economy will regain the heights it reached IN 2007 is paying off in spades.   The petroleum industry is booming with its all out use of fracking to extract major new energy resources.  And this industry that generates trillions of dollars in economic activity will lift all boats.   Think I’ll move to Minot.