The times when a king could refuse to pay the debts incurred to finance his wars are over, when the states were the ones bankrupting the banks. Today, states either bleed themselves to shore up bank failures, or fail themselves.
Those olden times include, for instance, when the Florentine bankers like Bardi and Peruzzi could only succumb to the superabundant power of a cashless crown. The world is turned upside down now. Let’s be clear: In principle, not even the greatest power in the world, the United States, can escape this rule, no matter how strong its political and military weight is.
We can say Obama has done better than Europe to bring his country out of the Great Recession. The unemployment rate has returned to pre-crisis levels and the economy has grown in recent years at a rate that we could define as acceptable.
He has not done enough, though, because social inequalities have reached unacceptable levels, and have grown in inverse proportion to the national wealth. Clearly, something has gone wrong with the “expansive” policy carried out by the government and the Fed: The gulf between the country’s debt limit and the conditions of the population is indeed too big.