The Coming Fiscal Shitstorm

Does anyone have any conception of the fiscal shitstorm that Barack Obama will be walking right into if he is inaugurated President in 2009?

It's not going to be pretty, folks.

Here's what Paul Krugman of the New York Times has to say:

It’s true that some prognosticators still expect a “V-shaped” recovery in which the economy springs back rapidly from its slump. On this view, any day now it will be morning in America.

But if the experience of the last 20 years is any guide, the prospect for the economy isn’t V-shaped, it’s L-ish: rather than springing back, we’ll have a prolonged period of flat or at best slowly improving performance.

And that's the optimistic scenario. On Charlie Rose the other night, Gretchen Morgensen of the Times and Allan Sloan of Fortune were talking about the very real possibility that we might fall into the "D" word.

That's Depression. Not recession -- Depression. With a capital "D."

I was not reassured by all the happy talk being made by government officials, including President Bush, over the past week. I have a saying: whenever people in positions of authority tell you that the markets are "fundamentally sound" -- grab your balls.

They're talking about banks failing. Of possibly even runs on the banks. Things we haven't seen in this country since that awful winter of 1932-33, when it seemed like the country was falling apart and that capitalism itself was doomed to be tossed on the ash-heap of history.

I know, people might say that I'm sounding like Chicken Little. Perhaps the sky isn't falling, and that I'm just being a little overly concerned. After all, I don't have a mortgage and I don't drive a car -- why should I give a shit?

Because I have a feeling that between now and Inauguration Day, the economy's going to get a whole lot worse before it gets better. And that Barack Obama is going to be relegated to doing what Democrats have been relegated to doing for the past 30 years -- being the guy with the shovel following the elephant in the circus parade.

It won't be pretty.