During the 1990s, the inflationary policy of the U.S. Federal Reserve fueled a tech-stock bubble. When that bubble burst, the Fed inflated a larger one in real estate. Now that the real estate bubble has burst, the Fed is inflating the biggest bubble of them all - a bubble in government.
While the earlier booms provided at least the illusion of prosperity - as well as some fun while they lasted - the government bubble will cripple the economy and deliver widespread misery to the vast majority of Americans.
Of course, there will be winners in the government bubble - at least for a while. As was the case with the stock and real-estate bubbles, plenty of money will be made by the well-connected and parasitic classes. Government employees will continue to enjoy pay raises at our expense, as will anyone benefiting from the new wave of subsidies, such as Wall Street investment bankers, financial speculators, and those working in healthcare or education.
in Money Morning
Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.