You are about to enjoy a great interview of Harvard Professor Niall Ferguson who is currently having Op-Ed wars with Paul Krugman in the NY Times. Ferguson, interviewd by a prepared Zakaria, makes a great case that we must have a "regime change" in fiscal policy.
Here are some Ferguson quotes:
" . . . At some point, the nasty fiscal arithmetic will get any country, even the United States . . . which is seen as the most attractive, the most safe haven country to invest it. I've been saying for a while US Treasuries are a safe haven the way Pearl Harbor was a safe haven in early 1941. It's safe until it's not safe. It's safe until the bond market says 'Wait a second, this isn't sustainable . . . we'd like a risk premium."
"Once you find your interest payments suddenly rising, it's very quickly a shift into a death spiral . . . a kind of tailspin in which things compound. The Greeks have been there, Spain is there now. Japan could be next, the UK teetering on the brink and somewhat within the next couple of years, the reality will be the Paul Krugman recipe will end up having costs exceed the benefits."
Ferguson goes on to give his ideas and other's options which are much different than Krugman's and Keynesian Economist's answers to the Crisis up to now.
A very engaging interview:
Part 1
Part 2
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