If Greece falls apart and the markets collapse, you are going to see the entire political focus here in the United States turn to, reining in our debt.
That's right.
Our idiot leaders and those currently running for president (maybe with the exception of Bernie Sanders), will unhesitatingly conflate the Greek situation with our own national debt "problem." The comparison is bullshit we know that, but they don't.
So, you will hear intensified calls for a "Balanced Budget Amendment" and the public will stand strongly behind this idea as they, too, are clueless about the real nature of our debt. A Balanced Budget Amendment will eventually get passed, I predict, and that will accelerate us on the path to "Full Europe."
If Greece goes then mark my words, what I have just described to you is going to happen
You heard it here first.
While the logic is sound I think that politicians' self interests will prevent that. Every economist, including the CBO, will scream about how a balanced budget will affect GDP. While mainstream economists don't understand the nature of Federal Debt, they do understand fiscal spending contributes to GDP. Once politicians realize a balanced budget will hurt growth, increase unemployment and they will get blamed, they will back off.
ReplyDeleteI don't think so Brian. It came very close to passing back in the 1990s.
ReplyDeleteSelf-destruction is de rigueur in economic circles these days, along with a weird sado-masochistic obsessiveness. The only way to reward is through ever-increasing pain -- daily shibboleths of "sacrifice" ring out until one vomits.
ReplyDelete....America is no Greece, but we do have a debt problem of our own, and like Greece, much of it is thanks to pensions.
ReplyDeleteJust as many retirees rely on the government for their paycheck… the government relies on us, the taxpayers, for the funds necessary to write those checks.
That means — you have a lot more debt than you think.....
http://investmentwatchblog.com/debt-problems-americas-striking-resemblance-to-greece/
Most "finance experts," bankers & economists were totally against Marriner Eccles & Beardsley Ruml too. Heck, Ruml himself only caught on for his retirement speech.
ReplyDeleteK, retirement is always an issue of real resources. Pensioner share of current output.
ReplyDeleteSee this K,
ReplyDeletehttps://originofspecious.wordpress.com/2014/12/02/whats-the-point-of-pension-funds/
I would agree at state/local level. At federal level govt taxes to create demand for currency and control inflation. It doesn't tax to raise money it already has unlimited money. Currency issuer.