...Bernanke-Obama models are inefficient and even ruinous. Mao could not export starvation through printing money since his money had no international acceptance; millions of Chinese had therefore to succumb to famine and cannibalism at different times, the latest in 1969 with 20 million deaths .. In contrast, under Bernanke-Obama model people are enjoying opulence as trillions of dollars are printed to finance fiscal deficits or provide unlimited loans .. The US dollar is still the world's main reserve currency and is accepted everywhere. Under the Bernanke-Obama model, large real imports that afford high living standards are paid for with printed dollars.
Nearly 50 million people in the US live on food stamps and 15 million on disability benefits. Hence, thanks to the dollar, starvation is exported and there is a huge drain of capital from the rest of world which will slow growth worldwide. Other vulnerable countries face malnutrition.
The inefficiencies of Bernanke-Obama statism are too numerous. Because of the dollar being a reserve currency, they affect the rest of the world. Bernanke, who was the master of George W Bush's economic policy, initiated near-zero interest and a super-cheap money policy that wrecked the US and world economy in 2007-2008. Bernanke's policy ended two decades of prosperity and brought misery and inflation. Lured by near-zero interest rates, many countries got into debt crises and remain in state of dislocation.
As predicted by Hayek, Bernanke-Obama collectivism is no different from Mao's and failed to restore economic growth. In view of dramatic increases in tax revenues, record government spending, and trillions of dollars in money printing, one would expect Keynes' multiplier to function and bring about 10% real growth per year, at least. Disappointingly, US economic growth remained anemic at about 1%-2% per year during 2008-2012.
The Bernanke-Obama model created too many uncertainties and explosive inflation in assets, housing, and basic necessities prices. Financial disorders are growing.
Inefficiencies of collectivist models cumulate over time. As capital is consumed and private sector is persecuted, a country loses its ability to grow and succumbs to inflation and poverty. Countries are left to make their own luck. If the likes of Mao, Bernanke, and Obama rise to power then no Hayek economics are relevant and we have to brace for the worse, hopefully falling short of cannibalism.
It is Mao's Red Book or Keynes' General Theory that dictate the policy principles of collectivism. No one knows the chaos that will follow Bernanke-Obama collectivism. If leaders inspired by Ronald Reagan and Margaret Thatcher rise to power then Hayek becomes relevant and lost prosperity is retrieved.
Nonetheless, once collectivism becomes deeply established, as now under the Bernanke-Obama model, with most of the population depending on direct money from the state and free wealth from Bernanke, it would be very difficult politically to reverse it. As Aristotle predicted, the country will be in a declining or, at best, stationary state.