Americans Still Believe in Santa Claus

Peter Schiff on the Economic Crisis that’s coming our way.

“The reason we’re in trouble is not because the housing bubble burst. We’re in trouble because it inflated in the first place. We’re in trouble because while it was inflating we were recklessly borrowing and spending money. American citizens borrowed trillions of dollars from people all around the world and we blew the money.

Now that the bills are coming due and we’re just too broke to pay them, we’re seeing an implosion in these markets. Real Estate prices are coming back down, Americans are having to stop spending, credit is contracting – none of this is the problem. This is all the solution. This is all the consequences of reckless consumption and borrowing.

What we need in this country is more savings and less borrowing. We need more production and less consumption. But everything the government is doing right now – all the economic stimuli, all the bailouts – they’re designed to perpetuate the problem, to get us deeper into debt, and all they’re doing is throwing gasoline on the fire.”