Categories Finance

Economic Insights: Markets, Investing, and Inflation – Economic Prism Part 250

  • 2026年2月20日
  • Estimated read time 4 min read
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            <p>Yesterday, Wall Street faced another wave of turmoil, leading to sensational headlines. However, at the Economic Prism, our focus today is not on the stock market's sharp drop, but rather on the underlying credit market and the implications it brings.</p>

We observe an increasing willingness among society to engage in self-destructive behavior. While we may lack concrete data to substantiate this claim, our observations and experiences tell us that the logic guiding collective action has become erratic. It feels as though civilization is on the verge of committing acts that would hinder its own progress.

On Friday, Standard & Poor’s downgraded U.S. government debt from AAA to AA+. This decision merely reflects a reality recognized by those who critically assess the situation: the creditworthiness of the U.S. government is now questionable. Without significant spending cuts, tax hikes, or rampant money printing leading to inflation, the government’s ability to repay its substantial debt is increasingly doubtful. Continue reading →

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            <p>At the start of trading yesterday, stocks initially paused, only to dramatically plunge afterward. The DOW ended the day down 512 points, causing widespread panic across Wall Street.</p>

This raises the question: is this decline a precursor of further downturns, or is it simply an opportunity to buy at a discount? Time will reveal the answer.

However, our primary concern extends beyond the stock fluctuations; it focuses on a weakening economy and the government’s potential for rash decisions in an attempt to remedy the situation.

Public trust in the government’s capacity to steer the economy is waning. If it isn’t already, it should be. Despite this, the government will likely continue to attempt to stabilize the economy until it faces undeniable challenges.

It remains uncertain whether citizens will support additional bailouts in the next economic downturn. The government is poised to respond with stimulus packages and promises of recovery. We may soon witness the unveiling of another governmental “solution” to economic woes. Continue reading →

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            <p>A notable upside of the government’s debt ceiling fiasco was the unexpected humor it provided. While a default would have been unfortunate, this spectacle delivered comedic entertainment.</p>

Take President Obama, for example. His antics brought much amusement. Has there ever been a more entertaining figure in such a high office?

Observing him can induce fits of laughter, particularly when he speaks. His remark, “Make no mistake – for those who reflexively opposed tax increases on anyone, a lower credit rating would be a tax increase on everyone,” illustrated the backward reasoning of a forward-thinking liberal.

Then there was House Speaker John Boehner, who, despite seeming honest by Washington standards, found it difficult to negotiate amidst the political chaos. Despite the challenges, his refused proposals provided us with much laughter.

The rest of the political cast—Mitch McConnell, Harry Reid, Chuck Schumer—were similarly comedic figures in this ongoing drama. Continue reading →

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            <p>Production is the End</p>

“The economic goal of any nation, as of any individual, is to achieve the greatest results with the least effort. The overall progress of humanity relies on maximizing production from the same amount of labor,” stated economist and author Henry Hazlitt in Chapter 10 of his book, *Economics In One Lesson*, published over 65 years ago.

Hazlitt argued that by maximizing production, full employment becomes an automatic outcome. He succinctly summarized, “production is the end; employment is merely the means.”

Regrettably, this fundamental insight appears to have eluded the United States’ central planners since the economic downturn of 2008.

Encouraged by academic figures like Paul Krugman, they attempted to tackle unemployment with large-scale government spending without considering its productive value. They relied on boosting job creation through excessive money printing and reallocating wealth via government intervention.

Consequently, deficit spending soared to unprecedented levels. Continue reading →

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