Very interesting portrait of some "economists'" ignorance of the real issue. The reality is: the irresponsible fiscal and montary policies will not bring a happen ending.

On his blog, economist Brad Setser raises some interesting questions about Bernanke's argument. More curious is what Bernanke—and other saving-glut champions—want us to conclude. He diplomatically noted that, "in locating the principal causes of the U.S. current account deficit outside the country's borders, I am not making a value judgment about the behavior of either U.S. or foreign residents or their governments." But of course he is. Bernanke tells us not to worry so much about the federal budget deficit—reducing it won't affect interest rates significantly. Meanwhile, foreigners should "ease borrowing constraints, to spur domestic consumption." The subtext of the meme is that Asians have to become big spenders and little savers like the British and Americans.

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The savings glut may be an accurate and subtle take on the world's economic imbalances. But less subtly, it minimizes the impact of the potentially destructive monetary and fiscal policies pursued by the U.S. over the last five years. It also lays the responsibility for change squarely on the backs of foreigners and makes a virtue out of what appear to be our own failings. No wonder Bernanke is so popular at the White House.