The specter of financial socialism is haunting global financial markets. Where free markets and the magic of the invisible hand were always the fundamental pride and strongest weapons of the United States in the fight against communism, America now appears to have abandoned its core principles and is leading the charge toward financial socialism. The role of government in America’s economy is surging and the bigger it gets, the lower the credibility of free market capitalism gets around the globe.
One of the greatest enemies of capitalism of all time, Vladimir Iiyich Lenin, said: “There are decades when nothing happens; and there are weeks when decades happen.” In America, this is exactly what occurred.
Last month, the U.S. budget deficit — $864 billion — was larger in one single month than the cumulative total debt taken out in the first two centuries after its founding: 1776 through 1979. Relative to the size of the current GDP, the explosion of government debt is also unprecedented. Most forecasters are now expecting the fiscal deficit to run at around 20 percent of GDP in 2020, up more than five-fold from the 4.7 percent reported last year.