CNN: What do you think caused this crisis?
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<!--endclickprintexclude--> Zakaria: We did, all of us. Since the 1980s, Americans have consumed more than they produced, and they have made up the difference by borrowing. Not only on the personal consumer level but in how our government runs.
Every city, every county and every state has wanted to preserve its many and proliferating operations and yet not raise taxes. How to do that? By borrowing, using ever more elaborate financial instruments.
Easy money plus leverage equals financial crisis.
CNN: OK. So what do we do now?
Zakaria: In the short term, all the solutions require that governments take on more debts and larger obligations. This is inevitable and necessary. But that doesn't mean we should, as some noted economists advocate, stimulate the economy with more tax cuts.
That would be only one more way to keep the party going artificially, like asking a drunk to go to AA next year but in the meantime to have even more whiskey.
A far better stimulus would be to announce and expedite major infrastructure and energy projects, which are investments, not consumption, and therefore have a much different effect on the country's fiscal fortunes.
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