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Pres. Obama reportedly won't be making a new budget offer to Republicans today, and will instead...
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Friday, December 28, 2012, 3:53 PM ETPres. Obama reportedly won't be making a new budget offer to Republicans today, and will instead reiterate last week's proposal. Stocks have tanked on the news. S&P -1%. Dow -1.1%. NASDAQ -0.7%.
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This news story has 98 comments:
Doesn't sound so honorable that way, does it?
Did we follow the same elections? I saw a president winning by barely 2% against a much weaker opponent with extremely archaic and conservative propositions. Americans weren't voting for Obama, they were voting against Romney. It's possible that your interpretation has been different, though...
You must support them because that is your logic.
It is "lose" not "loose."
Raising taxes to the wealthy people won't necessary increase the tax income for the country. It's just a populist move. Wealthy people pay more taxes no matter what. If your revenue is $90k a year and you pay a 30% tax, you pay $27k a year, while if you earn $1m and pay the exact same 30% of taxes it makes $300k a year for the government. That's much more productive, equal and more democratic to make everyone pay the same percentage. It's a whole different story when a state is trying to get through a crisis.
According to CNBC Mr Obama's project to increase taxes for families earning over $250k a year would bring some extra $40b a year. That's an extremely symbolic amount regarding the $16 trillions debt that the United States are facing right now. So yes, since I personally pay 55% of taxes a year (I live in Belgium), I suppose that wealthy people won't die if they start paying 39%, but it won't reduce the deficit. What bothers me, is that Mr Obama doesn't want to make any concessions by reducing the spendings and that is the main point here. Mr Obama is more interested in entering the history as being not only the first Black President, but also as the President who put in place the ridiculous European social system in the United States, while the country is completely broke. Mr Obama has his personal time scheme and so he's pushing all these reforms during a financial crisis without any regards for the economy.
In fifties people were paying everything in cash, there wasn't the same fiscal control over the population, mafia was detaining most of the wealth and that's why the government had to put such a high tax rate. The world is also much more open than in fifties so people can simply bag their stuff and leave to another country offering a more attractive rate. The economic boom in fifties had an extremely complex mix with the end of WW2, Baby boom, Marshall's Plan and the Keynesian Theory still had sense and was used wisely back than. You can study the situation in France, where the Government is going to set a 75% tax for wealthy people. A friend of mine owns a small independent Real Estate agency in Brussels and this year he sells 35-60 houses a month to French families at a price starting at €1,2m. I have an economical degree and I'm perfectly aware of the marginal tax and average tax. Nevertheless, the classic theory doesn't always fit to the modern reality. If the taxes are outsourced, higher taxes doesn't benefit the society at all.
Regarding the spendings, Obama offered a $400b spendings cut, while Republicans offered to cut $1,2 trillion, which is much more close to the reality. When a State has enough to live just during 7-8 months a year, do you really think that cutting 400 billions is "humongous"? If the Administration weren't borrowing that money, this amount would have been really huge, but since the country lives at credit, it's just ridiculous and it doesn't makes the financial situation any better. You can't hope that the debt would just vanish one day. There are many factors to that situation, but low personal savings and a negative current operations balance are simply dramatic.
To each his or her own. I like it here in the USA.
I'm sorry to tell you that but for a macroeconomist you have a particularly narrow analysis. And to be honest, I don't know what extreme right you are talking about. We live under a socialist European Government, which means high taxes for the wealthy, zero competitively and entrepreneurship for the businesses and free social care for the poor (often without citizenship). You can't speak about the EU as one single economical entity. Every country lives the austerity differently. Germany has been living in auterity for decades, they call it financial discipline. Of course, countries like Greece, Spain or Italy going through a hard period, but it's simply a consequence of their unconsidered spendings, lack of regulations and public money thefts by their politicians.
Now, as you know, to go through a crisis you have two commonly admitted options. Either you use a Keynesian theory and you increase the public spendings, either you apply the austerity measures. While the EU choose the austerity, the US, led by President Obama borrowed trillions in order to inject that money into economy provoking a huge inflation and a low artificial growth. Meanwhile the EU had a barely zero rate growth during the same period, but they held their deficit steady. Both systems showed their limits so I think that the solution might be a mix of the two technics. Anyhow, you can't borrow forever without any considerations for the future. Every cent that the Western countries borrow to China is borrowed by China from other countries. Today China has a record debt of 208% of its GDP, a huge personal debt among its citizens and a gigantic debt at its financial system (banks and funds). It's just the first visible consequence of the Western financial crisis. You just can't make the economy better without making significant budgetary cuts especially when you know that the central banks of the countries you borrow your money from, are flooding the world economy with cash in order to give a credit. They just postpone another huge world financial crisis and put it on someone else's shoulders. The issue is that today this coming crisis is above each and everyone of us and every country is going to be concerned. Raising the taxes is the most insignificant of all the issues, that our governments are facing.
Let's just get some facts straight first.
1) Germany has a debt to GDP ratio almost matching the USA (85% vs. 105%). So much for fiscal responsibility.
2) USA has no huge inflation.
3) China has about 25% debt to GDP ratio not 208%. That is Japan not China.
4) Even the ECB has finally realized that accomodative monetary policy is needed and they are now taking up a ZIRP as well. A dollar late and a day short. People suffered needlessly with 20%+ unemployment.
Finally, if you like to get huge unemployment from austerity programs, stay in EU. You are not going to get that in the USA.
2. Every Western country has a huge inflation, not just the US. It turns between 1,8 and 2,2% a year depending of the country, which is abnormal for a developed country.
3.Accroding to Bloomberg Newsweek and many other international journals, like for example the Belgian journal "Echo", the real China's debt goes around 200% of its GDP if you put together the National debt, the debt of its national banks, financial institutions, national industries and national companies. If you want to go to the strict economical sense of the debt you can also add the debt of Chinese families, which is also extremely high. And so, it goes much much higher than the official 41% of the GDP.
4. You can't compare European and American employment, the two systems are completely different. For instance, there are minimal salaries in Europe, that go around 950€ (after taxes) a month for the Western EU, so you can't hire anyone for a lower salary. The other difference, is that when you hire someone, you have to pay 100% of the salary of your employee to the social service to pay his social cover. So basically you pay 200% to every employee. The other thing is that we have many voluntarily unemployed people. It means, that instead of working to earn 1000€ a month, they prefer not to work in order to get 850€ a month from the social services, without doing anything. That situation can last years. So it's the whole social system that is corrupted and austerity is just a consequence of decades of social mismanagements, that Democrats are trying to set in the US.
That's for the Western countries, in Southern countries the situation is completely different. They misused the money that EU granted to them and that money fed a huge financial crisis in these countries.
There is no any kind of centralization in EU crisis. Every country is facing different issues and different causes put them in the crisis. Personally, I'm in favor of austerity. If EU could regulate countries like Greece or Spain, austerity might have worked better. Accommodative monetary policy might help western european countries like France, Germany, Belgium, Holland... but certainly not the Southern countries.
Anyhow, the United States faced a much harsher unemployment than Europe a couple of years ago. Now it seems to be settled. However, except Germany, nowhere else employers are allowed to reduce their employees salaries like they do in the US. With such a low salary, Americans can hardly be called "employed".
I think this discussion is fruitless. You consider a 2% inflation to be massive inflation. Which, frankly, is even beyond the orthodoxy of the far right economics. I have never, ever heard of any mainstream economist claiming that 2% inflation is massive inflation. I have no idea where you are getting this.
As for the rest, again I don't know what to say. for you, 85% debt to GDP ratio is no big deal and reflects fiscal prudence. Well, most austerity advocates would claim anything more than 50% debt to GDP ratio is imprudent. But hey, this is Germany, so they must be right.
Then, you use a strange measure for China, by which measure Germany's debt to GDP ratio is probably 500%. You have to use a standard definition is you are to engage in economic debates. you can't use one for Germany and one for China. Reality is using the same metric China's debt to GDP ratio is half that of Germany.
Finally, I do not care about the EU. They can solve their problem on their own, or not. I just want no ECB policies coming stateside. It is clear that the ECB doesn't care about creating jobs. It cares about keeping inflation low.
But the Fed has a dual mandate, to create job while managing inflation. The Fed has done superbly in lowering unemployment over the past 4 years. At the current policy, it will get USA close to the long term average of 5-6% unemployment in another 4 years through massive liquidity injection. In the process, it will monetize a large part of the Federal debt so that debt to GDP ratio will automatically improve. In addition, if that creates inflation, since the Fed will pay back with inflated dollars, in real terms the debt to GDP ratio will fall even more.
I am not going to get into a debate with you about what meets your definition of employment. I would just like to remind you that USA is one of the richest counties in the world in per capita GDP.
Anyway, bottom line, as long as you believe 2% inflation is massive inflation, we have nothing to talk about.
Nitpick all you want on data point A versus B but our Federal government is massively over committed. The states in aggregate are another $2 Trillion but that looks great next to the Fed Gov.
There are no good options when an entity is over leveraged to this degree and wants to leverage up more. The next 30 to 50 years will be a waste just like the last 10.
Corporations look great by comparison and are investing overseas like crazy to diversify their risk and participate in higher growth regions.
2% of inflation isn't "huge" as long as you don't think about it as concerning your money. 2% of you capital fleeing year after year, while your money is staying in you pocket and you think it's ok? Well, good for you, you must be either very rich, or very stupid... That might answer my question : "Anyway, bottom line, as long as you believe 2% inflation is massive inflation, we have nothing to talk about." - For me a normal inflation rate is 0,9-1,2%.
Regarding the debt, I think you misunderstood me. Read my statement again. You claimed that 105% debt matches 85% debt, it's simply untrue. In order to get the debt down by 20%, the United States, as any other other country, will have to lead an extremely conservative financial policy, have a steady growth, no deficit and maybe in 40 years, without any new crisis they might get to 85% of the GDP.
Regarding China, very few countries nationalize companies, banks, and industries like China does. What China presents as a national debt, is the Government's debt. However they don't announce how much their national banks borrow as a national debt. While these national banks lend cash to the national companies and industries. There is no any tricky economical formula, just a governmental scheme hiding the real Chinese national debt. So, no, Germany's national debt rate can't be 500%, since they don't own any nationalized indebted companies, nor banks.
I agree with you that Fed is doing a good job and I'm very glad for the US, hope they will get wealthier and less indebted, though.
Good luck with your 1% inflation. May you find it in Japan. That should do wonders to your investments. Me? I will keep getting 10%+ returns and 2% inflation, and be happy with it. I am not retired and not in capital protection mode.
Now write to your elected representatives to spank the ECB till it learns something from the Feds. Inflation needs to go up in EU if there is to be more employment.
As for China, I am not into conspiracy theories.
What's good for Obama is bad for America and vice versa.
What America needs is for Obama to cut spending and protect taxpayers, not add more spending and rape taxpayers.
We increased spending by $1.3 trillion under Obama and the Democrats, to $3.8 trillion a year from $2.5 trillion in FY 2007. Obama BOUGHT his public support by spending money we dont have to increase govt dependency. Obama won with the lowest form of campaign populist BS and since the numbers dont add up, he's setting up the Republicans to be the patsy's for his failure to square the circle... Obama's always about blaming someone else, and will never admit he owns the $6 trillion in debt he added.
Obama is doing what he can to bankrupt the treasury and we have idiots out there who actually approve of this insanity.
"you still just the loser. Face it you lost"
AMERICA lost.
LOLOLOLOL. That's a lie. We spent $3.8 trillion last year ... Obama wants that to INCREASE EVERY YEAR after this.
Obama has the Obamacare $2.5 trillion spending - will he repeal it? NOPE. Obama's proposal INCREASED spending, undid spending cuts that were already agreed, and threw in some 'stimulus' additions NOT in the budget. Obama's budget already sets us up for $8 trillion in more debt by 2020, on top of the $6 trillion in debt.
"Anyway, I think taxes on the rich can easily go up to 80-90% marginal rate."
Well, that's 2 things you believe that are nonsense. I guess I'll have to ignore your advice. You are living on another planet.
"The economy boomed in the 50's when rates..." still hurt the economy (and boomed after JFK cut them) but TOTAL GOVT TAXES AND SPENDING WERE LOWER. We had miniscule soc sec taxes and not medicare taxes, lower corporate rates and MANY LOOPHOLES - like NO AMT! - so total taxes for almost all Americans was LESS. Total income tax revenue was about 9% of GDP, no higher than it is today UNDER THE GWBUSH RATES.
"See, it is very hard to debate this issue if you have no interest in the actual facts"
Indeed. your are 100% wrong on your 'facts'.
Higher taxes damages economic activity and growth. That's the cause of most 'austerity' failures - increasing taxes backfires.
Obamacare's higher taxes will damage economic activity and growth.
Obama's higher tax rates on income will damage economic activity and growth.
"please. 20% of national debt for the USA in $3T. The USA can just cut military spending by half a trillion each year and pay this off in less than 10 years. Extremely conservative fiscal policy? You kidding me?"
Now I'm convinced that you've never even studied economy! You
have probably never been in college and you have an extreme limited economical knowledge. A true macroeconomist wouldn't even dare say such a nonsense! Deficit and budgetary discipline are part of the first year macroeconomy classes, every freshman knows these formulas. You're just another wanna-be professional economist coming to a wrong site. What a waste of time talking to you, kid!
PS: ECB and any Eurocrat in EU aren't elected by European citizens, they are appointed by EU Governments. I can hardly believe that you don't even know that...
While the Fed is inflating our dollars and shoveling more dirt into the same hole it dug it out of, the unemployment picture hasn't really improved. I know you're gonna throw the U3 nonsense at me, but lets face it, that number isn't going down each month because there are hundreds of thousands of jobs being created, its going down because so many people are dropping out of the work force. Whats our job creation moving average, maybe about 140,000 per month? That isn't even enough to keep up with population growth. If everybody quits their job and stops looking for work and unemployment goes to zero, but food stamp participation increases to 100%, should we be celebrating? I think not. In the meantime, we have the Fed keeping interest rates as low as possible, trying (unsuccessfully) to push out cheap dollars as fast as they can print them, but nobody will lend them. While they're doing this, savers are being punished. I can park my money in a savings account, and that doesn't even come close to keeping pace with inflation. Thanks again Fed, by practicing self-austerity, I'm actually losing money. Now, if the banks do ever start lending money again, all that will do is create another 2008esque asset bubble, which will inevitably burst.
So tell me, what part of your Fed success fantasy is actually successful?
Uhhhhh, Obama has never been a good President, just a good campaigner. He got re-elected. So now we the fool voters have trained up politicians to be campaigners not leaders.
That is why we are in the mess we are in - we reward the wrong behavior in politicians.
You prove it.
http://bit.ly/Vmw7rQ
Capt. Brian
The Lost Navigator
By the way, where did you hear that from? Rush or Hannity or the other idiots on right wing media?
The requests of both parties are not even band aids. Look at how many taxpayers there are, and the debt. Do some math and you tell me how we are to manage this mess. The real unfunded debt is in the lower right hand corner. and it is over 121 Tttttrillion dollars. Divide that by the number of taxpayers, 144 million or so, and that means that every taxpayer, (as they come and go) owe now, a mere 1,061,403.50 PER TAXPAYER. Do you have that much to contribute so America can be solvent?
To save your pencil lead, that is a current debt, (forget the unfunded amount) of 184,000.00 per taxpayer. I am not including all Americans because babies and some folks don't pay taxes. ONLY one third of Americans pay income tax.
I might add, that the average American has less than $6000.00 in savings.
I say, we are headed for the printing press to pay bills, and the taxpayer doesn't have one, but the FED does. When the dust clears a year from now, check the price of gold. I will insert here, as I said I might do in an earlier forecast (comment) here on SA, and if anyone can shoot holes in the bucket so it doesn't hold water, that would be wonderful. But I see inflation coming, and without huge cuts i spending in non essential areas, the fiscal cliff we keep worrying about will be insignificant compared to the real re-alignment that must occur, should America expect to survive in its present state.
here is my insert.
The Coffee Shop sees huge disparity in opinions as to the future price of silver and gold. Silver seems to be the main focus of attention of the usual investor which ignores precious metals. Although PM's seem to still be the black sheep of investors, somehow its price and movements are more frequent visitors to the coffee shop's wagging tongues than in the past. In fact, more frequent than ever before. So, with that, I suspect that perhaps the worm is turning. Perhaps worries regarding the fiscal cliff is actually more real than the Mayan Calendar or the Y2K event. It appears that worries about the FED creating inflation by printing money to cover our governments spending is much more real than the alignment of stars creating an end of the world scenario. I for one, am accumulating silver slowly and with planning and intent. I am not buying with both hands, and am keeping the majority of my shopping money available for when I feel the bottom has been seen. I think that $26.26 in silver, and $1,626.00 in gold is the bottom. I feel we will not see significant price movement up until that level is hit. I also think that level will not be breached on a significant value, and will not close below those levels on any basis you want. Be it moving averages, daily price, weekly, monthly or perhaps even hourly close. I feel buyers will show up constantly as those levels are approached. Should the PM's (precious metals) get within 5 - 10% of that level, I would begin to buy, heavier as my limits are approached. I should think also that numismatic coins should be purchased with great strength in here, as accumulating wealth in small spaces, will be the way to weather the financial storm coming. I do not believe in the destruction of the dollar, just lowering purchasing power. I do not expect the destruction of America, but the raising of our profile in international financials. We are beginning to bring manufacturing home due to financial factors now infecting our adversaries ( financially speaking ). They are beginning to suffer growing pains as we did. All of the debt plaguing us, our inflation is about to kick in. During 2012 I suspect silver to double in price, and perhaps even go to a quiet closing, (0ne you can catch to sell into) $100 per ounce. $60 for sure.
Hope am totally wrong, bet I'm not.
Good luck, and may God bless us, everyone.
Capt. Brian
The Lost Navigator
NOTE: The mines are going to continue to feel the same economic dragons as Macy's and K Mart. They will have payrolls, insurance, and rising costs. A nice shiny silver eagle will have none of those costs constantly working against its value. I own 100 shares of GDXJ and am not selling it. I also look at one share as one ounce of silver as I do my SLV and SIVR. I do not buy any PM stock or instrument that does not equal a price of the underlying metal, as it leads to criminal activity to strip your pockets clean of all including the lint. Just a word to the wise. Get the silver eagles and perhaps you may look at palladium. I recently bought my 1st Pd coin.
NOTE: I am going to copy this comment to a notepad, and likely use it in the future as a reference as I am sure my attitude won't change. Wish I was selling a newsletter with this comment.
Lastly, to put this in focus, in reality, the Obama Tax Cuts proposed would be the same as you cutting 1 35,000th of your spending, or to focus even more, use one postage stamp to pay two bills, would equal the spending cuts proposed by Democrats. Tax increases will only hurt the people who work for money, not those who wait for welfare checks. I do not include social security tax payers, as they have already paid taxes on the income they got, gave some to the US Government to hold, use and give some back. Why taxpayers submit to the financial beating of paying taxes on their own money being returned is a mystery to me. We are totally stupid.
Anyway, this comment is long enough, but not nearly as comprehensive as it could or should be.
Capt. Brian
The Lost Navigator
PS Did I mention I am gonna buy more Silver?
Macro Investor appears to be a political hack who read Cliff Notes on Economics and Paul Krugman and is lapping up standard fare like a left wing lap dogs.
Just another in a long line of political loyalists wishing as hard as they can that what the believe is reality.
Anyway, Krugman has been far more right than wrong these past years. Must be frustrating for the Lafferites.
Why? They warned America that we cant afford to spend money we dont have, that unlimited Govt is corrupt government, and that the people should rule the govt, not the govt rule the people.
So you hate common sense patriots who want to save America for bankruptcy? I guess you'll be happier when America has $24 trillion in debt in 2020 and our healthcare and entitlement systems collapse under the weight of unaffordable obligations.
Over-spending is the problem. The only solution is to cut spending.
Higher taxes = more misery and economic malaise.
No, you should do research to correct your manifest and obvious fallacies, non-facts, errors etc. You should do research and learn what's really going on so you dont pollute this place with economic ignorance. It's shamefully obvious you dont even know Federal budget trends and facts. Spending / GDP is at the highest peacetime level ever.
Increasing taxes to pay for that massive over-spending would spiral us into a depression.
Correct. Political hackery and massive mis-statement of what is really going on.
Somehow people forget who untied bank's hands and removed the whole banking regulation system that was in place since the great depression... Wasn't it Mr Clinton?
Listening to the news reminds me of the Tower of Babble (or Babel or whatever, ) you get the idea.
Capt. Brian
The Lost Navigator
"Thanks to Barry todays college graduates will have a lower standard of living than previous generations."
Exactly so.
He is not making an offer TODAY, because House members will not be back in town en masse until late tonight or early tomorrow.
The PPTs allowed an "orderly rout" today, and it has been orderly in the extreme, possibly with very few other than major Market Makers participating at all.
The odds are still with a significant but non-comprehensive deal by the deadline - i.e. preserved cuts up to $250,000, extension of a key benefits and spending necessities, everything else postponed until a slightly Kinder, Gentler GOP Caucus can be sworn in.
Sideline money of all kinds champing at the bit to come back into the Market, and it will start to do so by next week.
Contract turnovers in the commodities. PM stocks and Energy stocks have actually performed in very orderly fashion, as have most of the Industrials and Financials. These should be the leaders in a combo Relief-Delayed Santa Rally starting in Europe on Monday.
Let's see if the above is totally correct. I believe it is.
I agree with one of the commenter about opportunities in the upcoming market volatility, especially with the Fed looking to print over $1 trillion over the next year and thus taking out any potential "tail risk" in the market.
Got my shopping list together. Maybe Santa will make an appearance this year afterall.
The path we are on now isn't sustainable, period. We can exactly double the income taxes being paid by all who pay income taxes and it would just barely balance the budget. Tax a little more, spend a lot less, and give up on the notion that we are entitled because we are Americans. We got where we are because of hard work and much sacrifice, not because we were looking for someone else to solve our problems. Forget about getting help from our bankrupt government.
I have a brother who's retired military. Of course he says he put his life on the line (he did) and he deserves his retirement benefits. The medicare beneficiary says that he deserves healthcare and the social security beneficiary says that he deserves the pittance he's getting from the govt. They all have their point, but they all can't be paid in full. There will be some blood letting, for sure.
We can TRIPLE the savings of that by simply repealing Obamacare - a $2.5 TRILLION / 10 yr unaffordable takeover of healthcare.
Then go on to roll back every dollar of added spending since 2007... that would save $1 trillion PER YEAR.
Everyone knows Obama and Dems only ones to have offered compromise position at all, with spending cuts and Medicare cuts and soc security index put on table - Speaker Boner can't even get his own bill passed in his own caucus to bring tax rate on income over $1MM back to the pre Bush Rates - which BTW was supposed to happen 2 years ago when the cut rates were originally passed
Still cleaning up after Bush Cheney regime
Probably take another 4 years just like it took Clinton 2 terms to fix republican over spending
If you wanted a centrist solution, you should have voted Romney.
Its sad reading all of the MSNBC talking points that you lefties love to spew.
Now, I'm not quite sure how Obama and the Dems have offered compromise. At points, they said they'd be willing to offer $3 in spending cuts for every $1 in tax revenues. Now, the Republicans have offered 80 cents in spending cuts and $1.30 in tax revenues, and that has been painted by the left as not serious and a political stunt.
Its funny too that you Dems claim to hate the Bush tax rates, yet during a lame duck session, the Democrat controlled Congress extended them. Now once again, they're evil and the cause of this mess, yet the Dems want to extend them again to a majority of Americans. You guys need to make up your mind.
Now my question is, will Obama and the Dems ever take responsibility for what has happened under their watch? Or will it always be Bush's fault.
You lefties are pathetic and the biggest enablers of this "no-responsibility its-not-my-fault" society that we're turning into.
Making lemonade.
Why Wouldnt Obama? They voted for him!
"Actually, he is telling the Tea Party Patriots that they should have accepted the deal offered last week"
There was no 'deal' - Obama never had a 'deal'. Plan B? Obama threatened to veto it and threatened to veto every 'compromise'.
Obama offered higher spending and higher taxes.
"he deal offered now will be far, far worse."
Fine. PASS IT IN THE SENATE if it is such a great deal.
Mitch McConnell offered to vote on the Democrat proposed plan, but the vote was blocked by none other than Harry Reid, who said that voting on their own plan would be a political stunt. Gotta love DC eh?
Pure satire. The only question is which ones know they are spouting a Script that's satire and which ones are still totally clueless.
Too bad most of the regular Currency Trader crew were on vacation, since they are always the sanest in the bunch by far.
As for your "Tea Party Patriots," they are now officially a footnote in our history - and a rather comical one.
The main task for the GOP now is to come straight out and explain the difference between the words "Conservative" and "Libertarian;" why they are not only not the same concept, but generally opposing concepts; and how from this moment on, Republicans will embrace the former but NOT the latter.
Same here in the US. The political party games will not be remembered. It will only be remembered that the US failed and that we were fools. The more people talk about Rep vs Dem and are divided it tells me our minds are not focused on the real problem and solving it. We are arguing political points and they really don't matter against the larger problem. Our choices will go to zero at some point in the future.
Most don't like the idea of responsibility, hence why Romney wasn't elected. He wanted to put America back to work. Obama wanted to keep the party going.
Vener- laugh at the Tea Party all you want. But imagine if there was a Tea Party-esque faction in Greece before that country turned into a third world slum. Maybe they wouldn't have turned into that slum? Sure, nobody would be able to work only 20 years in their life, but at least they'd be able to pay their bills without causing rioting in the streets because the gravy is no longer flowing.
1. If nothing is done, the economy will go into recession immediately, because of tax burdens and a severe cut in government spending.
2. Obama prevails, and the tax burden on the top 2% becomes onerous, and they accordingly refuse to create new enterprise and job creation. ( they already pay 40% of all taxes, and 50% of the population pay no income tax - hmmm ).
The best resolution is to extend the current tax policy until the economy recovers, and slowly reduce entitlements over the next ten years. Enforce a policy of balanced budgets. Revise the out of date Labor laws, or repeal them altogether. Abolish the minimum wage, and limit the unemployment benefits to six months.
These easy changes would revive the economy and insure a prosperous future for the US.
Because of political payback schemes and government corruption, it will not likely happen, and the country is likely headed to the trash-heap of previously failed democracies, mostly because of political ignorance and selfishness. Yes, the truth sometimes hurts !
We are going into recession no matter what. The government gravy train can't roll forever. Its just a matter of when it stops.
I like your idea of staying the course with tax policy and a slowdown in entitlement spending.
The most important thing you said though has to do with the archaic labor laws we have. Repeal the minimum wage and watch the unemployment rate get cut in half in about 5 minutes. The problem is, you'll have lefties claiming how that idea is racist, and how can anybody support a family without a minimum wage. The minimum wage keeps more people out of work than Obama himself. Get rid of the minimum wage and cut unemployment benefits, and we go from an economy of bums sitting around cashing their handout checks, to an economy that is actually productive. Abolishing the minimum wage would be rocket fuel for the manufacturing sector.
For now, the presidents fiscal cliff strategy is the only one which will foster this change.
The distant view of a Swiss investor.
You really don't know what you are talking about. Example: "a country dominated by the young generation."
This country is dominated by the older generation and they have most of the wealth and are extracting more through taxes and debt and dropping the tab on the younger generation.
Stay at a distance it might just look better from that vantage point.
Prosperity can't be legislated. Don't forget that. But unfortunately, that is what politicians, especially Democrats, are attempting to do.