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The next four years will be a struggle to rein in spending, say tax advocate Grover Norquist....

  • Monday, January 14, 5:15 PM ET
    The next four years will be a struggle to rein in spending, say tax advocate Grover Norquist. Two major battles are looming over the next few months, the sequester on March 2 and the debt ceiling which the government will hit around the middle of March. While some have suggested a debt ceiling fight would lead to a government shutdown or, as the president has threatened, insolvency, but Norquist doesn't expect either one. "He can't do it, he won't do it," Norquist says. In the end, we'll find a way to pay our debt.
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This news story has 9 comments:

  •  
    Washington DC will NEVER rein in spending. It's what they do.....kinda like my "first" wife.
    14 Jan, 05:38 PM Reply Like
  •  
    "In the end, we'll find a way to pay our debt" should read "In the end, we'll find a way to trick the world into thinking we're paying our debt while vigorously avoiding any actual repayment."
    14 Jan, 05:57 PM Reply Like
  •  
    So wmateri - let me ask a question. I wonder why the politicians, Fed Chairman, Treasury Sec, etc. all "speak" the words as if they are really concernced about the "debt ceiling" and debt service and paying off the debt, when in fact, at least you and I (being two) know they don't have any intention of reining spending or paying off/down debt? Why the charade? Who are they trying to convince of what?

    I dont' know what the answer is, but I kinda think they want to continue the musical chairs game as long as they can without anyone ever knowing or understanding that some day the piper will really come calling.

    So my question is what's their true motivation for playing this game?
    14 Jan, 07:19 PM Reply Like
  •  
    wmarkw - Great question! The short answer is I don't know. The longer answer is that clearly Central Bankers know that all fiat currencies are based on faith (mainly on the part of bond buyers) and maintaining that faith is the central role of the CB. So a lot of the talk is building faith. The flip side of that is the threat that any currency attack will be met with such extreme force as to wipe out the attacker. Draghi's threat of OMPs (outright purchases of sovereign bonds, driving down interest rates) was just such a threat, leading speculators not to bet against the Euro. I suspect the Fed knows that Congress and the White House need to balance the appearance of responsibility with just enough inaction not to actually hurt the economy. The fiscal cliff "deal" probably did exactly that. Despite the lack of any real progress, the markets appeared to like the "deal" so mission accomplished. The economy wasn't thrown into a tailspin by a crashing market, yet little revenue was actually raised and debt issues were hardly addressed. Your own answer to the question essentially comes to the same conclusion. Why do they do this? I would suggest sheer, outright cowardice. Doing the right thing literally scares the crap out of the people in power because it will hurt both rich and poor and we would all know who is to blame. Thus, the issue can only be dealt with properly when someone outside can be blamed (currency or bond speculators would make a good scapegoat) or events too complex to easily understand can be blamed (as in the mortgage derivative collapse of 2008). Until then, the can will be kicked down the road indefinitely and everyone will do their best to pretend everything is alright.
    14 Jan, 07:50 PM Reply Like
  •  
    Your reply helps. Thanks.
    M
    15 Jan, 08:53 AM Reply Like
  •  
    Obama's credit card has no limits --- the congressional midgets will approve his $1+ trillion deficits for another four years
    14 Jan, 06:23 PM Reply Like
  •  
    Who elected Grover Norquist?
    14 Jan, 06:43 PM Reply Like
  •  
    Why does one have to be elected to advocate for responsible government. Oops, sorry. I used an oxymoron.
    14 Jan, 07:20 PM Reply Like
  •  
    "Norquist says. In the end, we'll find a way to pay our debt."

    Debt is always paid, whether you find a way or not. Nature just takes care of it for you. Debt is just spending, and somebody, somewhere, always pays for that. The trick is not to spend in ways that your income doesn't support or that doesn't lead to ways to improve your income. If you ignore this rule of nature, it will punish you regardless of your good intentions or economic theories. Nature doesn't care about what you believe or wish to be true, it only cares how you act.
    15 Jan, 05:06 AM Reply Like
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