If you get a flow of credit increasing, as we've seen in the last few years - that flow of credit didn't go to more wealth accumulation as we normally use the term in economics, as capital goods. What you got is an increase in bubbles of one kind or another.

In the U.S., you couldn't have job creation with interest rates of 30 or 40 percent. They had a philosophy that said job creation was automatic. I wish it were true. Just a short while after hearing, from the same preachers, sermons about how globalization and opening up capital markets would bring them unprecedented growth, workers were asked to listen to sermons about "bearing pain." Wages began falling 20 to 30 percent, and unemployment went up by a factor of two, three, four, or ten.

The national debt will have increased by approximately 50% in just eight years! We will have created a new unfunded entitlement - disability and health care benefits for the huge number of disabled veterans returning from the Iraq war.

The problem is a lot of what is called economics is not economics. It is more ideology or religion.

The important lesson of the deficit is - and the national debt - is we have to be careful about how we're spending money.

If you get a flow of credit increasing, as we've seen in the last few years - that flow of credit didn't go to more wealth accumulation as we normally use the term in economics, as capital goods. What you got is an increase in bubbles of one kind or another.

America has had to turn to foreigners to finance its debt - not surprising since household saving in the last years has plummeted to zero. China is one of the largest holders of American debt.