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Richmans' Trade and Taxes Blog
December 31, 2012, is a date that will live in economic infamy
December 31, 2012, is a date that will live in economic infamy. Six days after Christmas, Republican and Democratic leaders decided to reverse the effects of Santa Claus. They agreed to steal from America's children so that adults could have some short term benefits.
Instead of reducing the federal budget deficit from $1,327 billion to $825, as would have occurred automatically, had the negotiations failed, the final deal will only reduce budget deficits by $63.5 billion according to Fox News' Ed Henry. Up to $100 billion more could be subtracted following the sequester debate. The national debt will continue to grow at at least a $1,163 billion per year pace while GDP will probably continue to grow at about its current $647 billion per year pace.
House Speaker Boehner has already promised a vote on the bill, so it may not matter how many House Republicans vote against it. Almost unanimous House Democrats will probably be joined by enough Republicans for it to pass.
Within 10 years, U.S. interest rates will climb, federal debt payments will soar, the Federal Reserve will inflate the dollar in an attempt to keep interest rates low, and the dollar will collapse on foreign exchange markets.
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