When you are watching the evening news, the U.S. Senate debate or like I am now, watching Fox News business Saturday morning substitute the word steroid for stimulus then replay the professional sports steroids issue in your head.  All these folks screaming for more financial steroids, they sound like addicts.

Kathleen Hays of Bloomberg TV interviewed Bill Gross the other day and no one has more at risk than he does, and he clearly stated that the dose of steroids he thinks the economy needs is three times what Congress is considering. 



There are three distinct periods of growth in this chart:  1950 to 1980, 1980 to 1995 and then since 1995.  If you accept the growth rate from 1980 to 1995 as the long-term sustainable rate of growth for the US economy as measured by the SP 500, we are right where we belong. 

If you think the 1980 to 1995 growth rate is too high as the long-term growth rate, then we are at the top of the potential range and bottom of the range would be 250-300 if the 1950 to 1980 is the right rate of growth. 

Clearly the post 1995 growth rate is not sustainable and the growth far to volatile for the public, investors and governments to manage.

Clearly this chart looks like the National Baseball leagues total home runs by year.  The steroid use clearly stands out just as the financial steroids stand out in this chart.

What happened in 1995 and has persisted since?  Goldman Sachs took over the US Treasury with the appointment of Robert Ruben.