The U.S. Economy: Burning the Furniture

Given that there isn’t a whole lot of good news elsewhere on his watch, President Bush has been campaigning relentlessly on the U.S. economy, which has recovered to a great extent since it tanked shortly after he took office.

Not so fast, says the Economist magazine in a party-pooping editorial noting that hidden beneath the economy's shiny surface are historically huge imbalances:

Part of America's current prosperity is based not on genuine gains in income, nor on high productivity growth, but on borrowing from the future. The words of Ludwig von Mises, an Austrian economist of the early 20th century, nicely sum up the illusion: “It may sometimes be expedient for a man to heat the stove with his furniture. But he should not delude himself by believing that he has discovered a wonderful new method of heating his premises.”