I rarely write about politics, but given last nights events, it seems appropriate to make a few comments.
Personally, I have moved from liberal in college to libertarian when I was a bond trader to conservative Democrat to my current position of independent. I'm an independent for the following reasons: the Democrats can't lead at all -- they want everybody to get along -- and don't want to hear basic economic information when it runs counter to their narrative, the Republicans have walked away from logic and fact and the Tea Party could care less about mere competence. As such, all parties have key flaws making them unable to effectively govern. Hence, you get our current mess.
Do I think anything will change? Yes -- for the worse. The economic recovery is fragile and still needs support. It will not get it. Within the first year, the House will either argue about what spending to cut and implement same or will wind up shutting the government down for a short or extended period of time (completely forgetting the GDP equation). This will seriously threaten if not jeopardize the recovery. The Senate will cower in fear and accomplish nothing (which is to be expected from an institution populated by really old white guys) and the President will be ineffective (thinking that selling anything is below him)-- at best. As I have repeatedly said there is a time and place to cut spending. This is not the time.
What the country needs is the following: once the recovery is cemented, taxes have to increase and spending has to decrease. The problem with the first is Republicans are married to the "tax cuts always pay for themselves" line of nonsense (the stupidity of which Barry Ritholtz clearly explained and refuted in this post) and the Democrats are completely unwilling to look at entitlement reform -- spending which now accounts for about 60% of federal expenditures and which has been increasing for the last 30 years. The input/output gap at the federal level is simply too wide to be solved by any other option. Yet neither party wants to compromise on their core issues. As such, the impending train wreck continues to approach.
So, I think the election means we're not going to solve anything and the fundamental problems will get worse.
PS
Have a Nice Day
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7 comments:
What do you think the impending train wreck will look like?
Yup. It's going to be two years of, at best, no progress, and at worst, epic fail. The american people made a disastrous call last night. I only hope they realize that by 2012
Bondad - Specifically, what are the entitlement reforms you think are best to solve this spending gap?
Well, ending two bad wars would be a first start. Then cutting Pentagon waste would be next. I still can't get over how the Pentagon "misplaced" $2 trillion.
But I don't expect the Republicans to do any of that. I expect gridlock as the crazy newbies fight with the entrenched Repubs and Dems. Tax cuts haven't created any jobs; all they do is raise the deficit. And since the Repubs vowed no new taxes, bingo, you have no solution to anything.
I'm going back to stocking up on coffee, sugar, and jewelry for the black markets I expect to spring up as things fall apart.
What possible motive do the republicans have to work with Obama in stimulating the economy? If they do, and if the economy improves, Obama will benefit going into the 2012 elections. I think the republicans in the house are going to kill everything coming out of the Whitehouse except extending the Bush tax cuts. If the economy stays in the tank, they (republicans) can blame the president and thus take control of the Whitehouse again. I’m personally sick of both parties and this kind of foolishness. I don’t know what to do other than move to another country where the government actually works. I hear New Zealand is nice.
The thing is, Republicans can work with Obama behind the scenes while pretending to fight him tooth and claw. Their propaganda machine will claim they are doing exactly what teapartiers want.
Then comes 2012, Republicans will claim an improved economy and deficit picture is because of what they did. This will be at best a gross distortion and more likely a lie. Economy will improve as balance sheets improve and the deficit picture will be dealt with because of the commission that Obama set up. Republicans of course will complain wildly about every facet of that plan, then vote for it, and claim victory for the results.
I have to disagree. The main problem with entitlements is health care costs, SS needs only minor tinkering but medicare and medicaid are in serious difficulty going forward. The Dems did do a half-hearted and suboptimal attempt at health care cost reform. It may be too little too late, but at least it was an attempt to get at the core of the entitlement problem.
The real problem is that voters want lower taxes, no cuts in SS or medicare, no cuts in defense spending and lower deficits. No politician can meet those demands.
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