Apparently our favorite ex Goldman Sachs CEO and current US Treasury Secretary Hank Paulson said this today.

“Millions of Americans” are being denied credit or facing rising credit card rates, “making it more expensive for families to finance everyday purchases.”

So… everyday purchases are being made on credit? Maybe… just maybe… that’s why the economy is in the shitter. Why are people living on credit? Massive government incentives.

Yes it’s been said a million times by people like Ron Paul, Peter Schiff, Jim Rogers, Lew Rockwell and friends… but: You must live below your means. The illusion of prosperity will only last for so long. You can only borrow for so long. They will only lend for so long. At some point you must face economic reality. Wealth does not spring forth from magic government pixie gardens. All it does is create massive market distortions which collect over time and at some point reality snaps it back. It sucks but you deal with it now in the short term or you deal with it later for the long term.

BRILLIANT! Can’t have an inflation induced business cycle if the market is too regulated to function and the people too taxed to invest.

The part about Hogan’s Heros at the end is great.

UPDATE: Ron Paul on CNN this morning

http://money.cnn.com/…

Former Federal Reserve Chairman Alan Greenspan told a House committee Thursday that the nation will emerge from the current credit crisis with a “far sounder financial system.”

“We are in the midst of a once-in-a century credit tsunami,” Greenspan told the House Oversight and Reform Committee.

Greenspan said that whatever regulatory changes are made to respond to the crisis, “they will pale in comparison to the change already evident in today’s markets.”

Because of their hard-won experience, markets “will be far more restrained than would any currently contemplated new regulatory regime,” he said.

“Investors, chastened, will be exceptionally cautious,” he added.

In opening statements, Rep. Henry Waxman, D-Calif., committee chairman, said the current economic crisis could have been prevented “if regulators had paid more attention and intervened with responsible legislation. The list of regulatory mistakes and misjudgments is long and the cost to taxpayers and the economy is staggering.”

Waxman put Greenspan on the spot, asking if he made any mistakes during his tenure as Federal Reserve chairman that may have contibuted to the mortgage crisis.

Greenspan said he made a mistake in presuming that lenders themselves were more capable than regulators of protecting their finances. He said he was “shocked” when that system “broke down.”

“I still do not understand exactly how it happened,” said Greenspan.

Perhaps he should talk to Ron Paul and Austrian school economists then. This guys a joke.

Not too surprising given Ludwig von Drake was supposedly named after Ludwig von Mises.

Perhaps some at Disney are Austrians.

I remember that episode when I was a kid.