Last edited by PzKfW IVe; 07-13-11 at 08:37 AM.
IMO, some of the comments about the debt ceiling, especially among radio hosts such as Mark Levin (who is openly championing a failure of negotiations), are surreal. The political denial in Washington is also quite surreal.
Major fiscal consolidation is necessary and inevitable. Indeed, one fund manager argued that a U.S. default is a matter of time.
Increasingly, the only real question is whether the U.S. fiscal consolidation program will be something the U.S. has latitude to shape when market conditions remain relatively benign/interest rates abnormally low or something that will essentially be imposed when a crisis is imminent or underway. The former approach would allow for a transition to mitigate the macroeconomic and social pain. The latter would require wrenching choices and little or no transition. The former could be feasible with smaller sacrifices. The latter would require much larger ones, due to higher interest rates/reduced long-term growth prospects, and prevailing negative psychology. The sooner credible action is undertaken, the less likely a crisis would be. Little or no credible action over the next few years could well provide the invitation to a crisis.
Finally, if I were evaluating U.S. credit risk (and it's probably a good thing that I'm not), I would probably put the U.S. under review for a possible ratings downgrade if no debt ceiling deal is reached in the next 7-10 days. Then, beyond a debt ceiling-modest fiscal consolidation agreement, in order to preserve the AAA rating, I would be looking for progress with respect to two criteria over the next 6-12 months:
1. Construction of a balanced and credible fiscal consolidation strategy, with a credible upfront component. Mandatory spending and Tax Code changes would both be needed for the longer-term. Spending-driven consolidation should, consistent with empirical literature on successful consolidation efforts, exceed revenue measures by a > 2-to-1 margin. Moreover, tax measures should be focused broadly not narrowly.
2. Evidence that the U.S. is undertaking steps to address what is now a political dysfunctionality problem.
Failure to begin laying out a credible fiscal consolidation strategy would leave the nation on its present unsustainable fiscal course. Failure to begin addressing the political dysfunctionality problem would raise questions about the credibility of U.S. fiscal commitments and the capacity to shape/implement/sustain a fiscal consolidation strategy.
We've been kicking this can down the road long enough. It's time to show fiscal responsibility. I can't stand when liberals say "well we've raised it a half million different times in the past, why not this time?" That is irresponsible, immature and completely clueless behavior/attitude. And what's worse, is saying that republicans have raised it in the past. Ok, so what? If McCain would be in office right now I'd still stand behind not raising the debt ceiling. We can't keep this up, if we don't cap our debt, we will collapse as a nation owing a lot more than we owe now. As it is, we can't pay our debts off if we wanted to. Our unsecured debt is more than all of the money in the world. How the hell do we pay that off? Who cares if our credit rating goes down a step? We're still the strongest economy in the world and investors around the world STILL run to the dollar when they get scared. If America gets downgraded to AA status from AAA, then AA will be the new AAA. Simple as that.
No, it's time for fiscal conservatives to behave according to why they were voted in in November. Liberals don't like to admit it, but the ass whopping they took in November was in direct response to Obama's poor handling of the economy. Republicans were elected to fix this mess and stop the madness. I agree with Sean Hannity, any republican that votes in favor of raising the debt ceiling is committing political suicide. They weren't voted in to continue business as usual, like the democrats want to happen so badly. No, they were voted in to actually DO something, and I'll be damn, they're doing something. I've never been more proud to be a libertarian who is actually supportive of the right at this moment in time with regards to this issue. Stand firm and stand your ground. We can't keep going like this, its going to hurt a little now or a lot later. I vote for a little now.
Last edited by dontworrybehappy; 07-13-11 at 09:12 AM.
What a dirtbag move by the POTUS... Scare and fear tactics...... These checks will go out, and Obama should be ashamed of himself threatening seniors and Veterans.
Matthew 10:34Think not that I am come to send peace on earth: I came not to send peace, but a sword.
Sure it is. It's not an -easy- approach. But, at this point, nothing is easy.That's not a viable approach.
Last edited by PzKfW IVe; 07-13-11 at 09:27 AM.
Social Security is an important things for all social life. So we need social security all times.
“If we must have an enemy at the head of Government, let it be one whom we can oppose, and for whom we are not responsible, who will not involve our party in the disgrace of his foolish and bad measures.”
- Alexander Hamilton. Spiritual father of #NeverTrump