Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
Washington postponing real budget cuts
According to the Los Angeles Times, the House Republicans just passed a plan that would only reduce the $1600 billion 2012 budget deficit by $111 billion. Here's a selection from the story:
Meanwhile the so-called "gang of six" consisting of three Senators from each party put together a plan which is a lot like Rep. Paul Ryan's House Budget Plan in that it would slow the growth of government spending while reforming the tax code in hopes that lower marginal rates would help the economy. You can read the executive summary here.
There is clearly no appetite in Washington for actually balancing the budget. Each party is simply pretending to be doing something in an attempt to appease those Americans who have economic common sense. Our elected leaders know that if they balanced the budget without balancing trade, they would bring about a severe recession, and they are too internationalistic in their outlook to even consider balancing trade.
These plans let our elected leaders pretend to be fiscal conservatives even while they let the mercantilist governments steal American industry. The economic stagnation that they are causing will likely continue until the coming dollar collapse balances trade the hard way with high inflation, high interest rates and a severe cut in the U.S. standard of living.
The American people may yet elect leaders in time with enough economic common sense to balance budgets and trade at the same time. If not, we will eventually experience an economic crisis that will stimulate economic growth the hard way.
Journal of Economic Literature:
Atlantic Economic Journal: