I think what we're seeing is the chickens coming home to roost. We had excessively large tax cuts in the Bush-era, I don't blame them for cutting taxes in the early stages of his administration, but once the economy recovered fully, he should've raised taxes again. We've had wild overspending under Mr. Obama without any clear results from it. So, the combination of too low taxes, too much spending, has just been a disaster and the disaster is getting worse.
We have a hundred percent ratio, roughly a hundred percent, of the debt to the GDP. That has not happened since 1945. After that, we got rid of that enormous ratio by inflation and by the economy growing and the deficit stopped. The deficits are stretching out as far as the eye can see. There's no end to them in sight. So, it is a worrisome situation.
On the other hand, to strike a little lighter note, in terms of the accuracy of the S&P's predictions, they're also the ones who said there were no problems with the mortgage-backed securities. So, we don't know whether there as good at forecasting these things as they say.
~Ben Stein, actor, author and economist, WSJ's Markets Hub, April 19, 2011