Guest Post: Why We Are In Deep Doo Doo

TW: This is from a reader/financial professional, he is concerned about where we are headed, his comment dovetails with the earlier Krugman post:

From Anonymous Reader
"The real issue with monetary versus fiscal stimuli is not that one has ceased to work and the other has not. It is that neither is working as it should. The reason is that both "stimuli" are supposed to be applied in downturns then taken away and the capability to stimulate replenished in the boom times. The dips are supposed to be filled in by shaving some of the top off the peaks. However, from a political perspective it is obvious that that will never work.

Much like a drug addict, we want to be stimulated all the time and more so in the dips - no lows and ever higher highs. And that is exactly what we have been doing (including Clinton if you look at off-balance sheet liabilities) by running constant budget deficits and continuously loose money policies. To continue the analogy, the US is a multiple drug addict. Drug use has put it into a coma. The drugs to which it is addicted are the very ones usually needed to revive it. Normal dosages no longer work. Therefore, massive dosages are now required which may not work and may kill the patient. The other problem is fiscal and monetary policy are linked in extremis. We no longer have a free hand with fiscal policy without a significant inadvertent impact on monetary policy."