The U.S. Capitol Building is pictured in Washington, February 27, 2013. REUTERS/Jason Reed
Bloomberg: Skyrocketing Deficit? So What, Says New Washington Consensus
With its plaintive call for balanced budgets, the fiscal hawk once pervaded Washington. But it’s getting harder to spot one.
That’s because of President Donald Trump, and the equal-and-opposite reaction he’s provoked on the U.S. left.
Trump is proving as indifferent to fiscal orthodoxy as to any other kind. The spending measure he signed on Friday, along with the one approved in March and December’s tax bill, amount to the biggest stimulus outside recessions since the 1960s. They sailed through a House led by the supposedly hawkish Paul Ryan, who’s due to step down in January without much progress on his goal of reining in so-called entitlements like social security -- an illustration of how Republican deficit scolds are in retreat.
On the Democratic side, the reaction that’s firing up the grassroots isn’t “How could you do that?’’ It’s: “Why can’t we do that?’’
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WNU Editor: Like maintaining a massive trade deficit with China, U.S. budget deficits are not sustainable in the long run. How long will this continue? Your guess is as good as mine, but when the U.S. economy inevitably slows down or when interest rates go up to "normal" levels, there is going to be hell to pay.
In terms of total, US debt looks huge. But that's not how to look at it. Debt and capability to pay off interest, is assessed by looking at the GDP first and foremost. Taxes might have to be adjusted for a few years, that's about it. Debt in China is much higher. Debt in many eu countries is higher. There's very few countries (usually small ones operating half of their economy as tax havens..EG Luxemburg, and good debt level in some small Skandanavian countries too..)..
ReplyDeleteI recall living in a not nice American city. Residents, paying very high taxes, used to say: Look, we get our refuse picked up, free, at the curb every week. Of course, the schools were very bad, policing horrible, streets filthy, snow removal very bad, many businesses closed etc. but look what we got for our high taxes!
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