The biggest news story of the year

The Huffington Post asks what is the biggest Canadian news story of the year.  Here is my answer:

http://www.huffingtonpost.ca/2011/12/05/what-was-canadas-biggest-news-story-2011_n_1116964.html?ref=canada

The biggest news story of the year is the economic crisis which is being felt around the world.  It has been reflected in and overwhelming number of headlines.

The probable cause of the crisis is a depletion of resources.  Some people figure we are using resources at a rate that is 150 percent of a sustainable level.  This is showing up as a financial crisis.

A further problem is that as a financial crisis it threatens to wipe out a major chunk of the money supply as banks create money when they make loans.  This will further restrict our ability to exchange goods and services.

A lot of economists want to deal with the crisis with government stimulus spending.  However, if resource depletion is the root problem, then increasing our economic activity will make the crisis even worse.  The answer is to try to even out the pain of austerity.

(The author of this comment has a web log on economics at https://economics102.wordpress.com/)

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