The problem we have is not a given problem like the fiscal cliff or now, the debt ceiling. The big problem is that the reasoning of decision makers is faulty. That guarantees a bad outcome. Today it is popularly believed that government spending is a necessary ingredient for causing economic growth. Austerity in government is being avoided under the mistaken belief that government spending will stimulate the economy in such ways as to make austerity more reasonable at a later date. Such has never been the case and it never will be.

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