Wednesday, February 09, 2005
Approaching critical mass? Even though everything so far is just talk, it does seem like we are in unstable fiscal territory. - General unhappiness with Bush's proposed budget. Cuts that are for show; unlikely to be realized. Other cuts that don't do anything to help the deficit.
- Hidden costs, to be revealed later (mostly for the Defense Department and the war)
- A budget that includes yet-to-be-realized "proposals", allowing for all manner of fictions.
- The latest on the Medicare Drug Benefit. Costs are likely to be much, much higher: $600 billion? $1.2 trillion?
- Bush implying a default on trillions in bonds.
- Claiming to get revenue when that's not certain.
- The ever-present current account deficit. (Trade deficit.)
That's a partial list. But underlying all of it are two basic facts: - Bush's absolute refusal to look at revenue increases - in other words, taxes.
- A frantic effort to paper-over the resulting shortfalls or budgetary pain.
When will the international community say, "Enough!"
posted by Quiddity at 2/09/2005 03:11:00 PM
5 comments
Impossible to say for sure, but financial crises and crashes tend to happen in the fall. The catalyst could be anything-more bad news in Iraq, China refusing to buy more T-bonds, another terrorist attack...my money would be on September-November, 05' (I doubt we'll make it through another year with record fiscal AND trade deficits...and no prospect of reductions in either). In any case, we're talking months, not years.
Oh, the international community is noticing already. China, Russia, Japan, Taiwan, and even the OPEC states are starting to shift reserves from dollars to euros.
Even better, Bill Gates, Warren Buffet, George Soros, and a host of lesser lights are actively betting against the dollar on the international currency markets.
On the plus side, though, the collapse of the dollar could put Wal*Mart, Target, and lots of other Big Box stores out of business. When the Chinese crap they sell suddenly quadruples in price, that will drive most of their customers back out the doors.
I disagree that the budget cuts are all for show. I think most of them are the real thing.
Look at where the cuts are, where the poor and likely Democrats are. I think that it is done out of sheer spite because he can.
Read this article by Grover Norquist that gloats about how hard we will have it if Bush got elected:
http://www.taemag.com/issues/articleid.17898/article_detail.asp
He brags that we won't be able to eat and said that anything less than snipers on the roof would be an underreaction by the left.
Well SURE, the little turd would love to get all of those cuts, but it just will not happen. I suspect, because I distrust those neurocons so much that some of it is just to throw us off the path of what they are REALLY doing...they are a GREASY BUNCH OF PLUMBING CLOGGERS!
“We cannot live for ourselves alone. Our lives are connected by a thousand invisible threads, and along these sympathetic fibers, our actions run as causes and return to us as results.”
- Herman Melville
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