This makes sense, although I think it’s written in an unproductively harsh way at some points:
American consumers are awash in debt, drowning in it. This is the
fundamental issue with the stimulus proposal. We’re trying to borrow
our way out of debt. Unfortunately, we need a recession. That is,
consumption must decline because for some time we have been consuming
more than we produce or have reasonable prospects of producing.
Monetary policy has been used to inflate a series of bubbles to avoid
the consequences of excess debt, and the more we try to hold it off,
the worse it’s going to be. Bourbon works as a hangover cure, but only
for a while.
It’s theoretically possible for an
intelligently-designed stimulus action to help smooth this landing a
bit, but we can’t avoid a painful adjustment. Americans are going to
live in smaller houses, drive older cars, vacation nearer to home and
have less impressive digital camcorders than they expect.