So US is running a big deficit without growth 1. If nothing is done -> weakened dollar, inflation, derating 2. If it tries to cut spending unemployment would increase 3. Any attempt to increase taxes would slow consumption so basically there is no solution, right?
You could do what the Tea Party does and pray like there’s no tomorrow.
Fiscal stimulus. Prefer tax cuts to spending increases but there are some areas that spending could be shored up as well. It really is that simple. The government debt situation is not ideal but it is nowhere near a crisis - it has been made into one to serve political agendas based on the false assumption that “well if I have to cut back on my spending then the government should have to cut back on its spending”, and concerns about the long term sustainability of entitlement programs that will become an issue decades out. If everyone tries to save then no one can. I’ve started referring to the “Tea Party” as the “Kool-Aid Party”.
funny because we’re not in as bad a position as france, greece, spain, ireland, germany or our trading partners who depend on us for growth (ie. mexico). though i’ll probably catch a lot for it - i don’t think the Tea Party is to blame here. they pushed for a Balanced Budget Amendment and the democrats tabled it so it would not even be brought up for discussion. isn’t not having a plan for paying future debt why SnP downgraded us? looks like the Dems really are to blame here.
black_label Wrote: ------------------------------------------------------- > so basically there is no solution, right? no, there are always solutions, but i don’t really see any actionable items other than fiscal responibility. right now the environment is still churning (AIG lawsuits, foreclosure proceedings, legal bank landscape, etc.) so unemp isn’t really something that’s going to be steady for a while. spending more really isn’t the answer because there isn’t really a clear path to lay out, other than the road, bride, tunnel projects and possibly some r&d tax incentives. fiscal responsibility never goes out of style. if we teach it to our kids why aren’t we practicing it?