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Investment Analysis Clubs / Macro Economic Trends and Risks
|Subject: Re: The Fiscal Cliff-Solving the wrong problem||Date: 11/13/2012 10:49 PM|
|Author: OrmontUS||Number: 408417 of 467380|
A few points:
Yoda makes a good point in pointing out that addressing the tax cuts of item 3 (the wealthy) satisfies the majority of the population's fascination with punishing someone else (and especially one who is better off).
My proposal (repeated here a number of times) that the cuts for everyone (rich and middle class) should be allowed to expire. That simple non-action would address 60% of Yoda's list. It is also a political non-starter as it would negatively impact the majority of Americans.
The "Fiscal Cliff" should more accurately be called a poison pill. How badly our economy would be mauled by crossing that line will be dwarfed by the perception that it is a REALLY bad thing. As perception becomes reality, the destruction in the various markets would be a self-fulfilling prophesy.
To avoid causing a small amount of pain to each of our countrymen by causing general financial mayhem (and if our credit rating is impacted at Fitch & Moody's to match S&P) long term economic pain is simply silly and to suggest that it is a good idea is just whistling while walking past a graveyard.
After 9/11, the City of New York put up with (the new) Mayor Bloomberg despite the fact that caused fiscal pain to all of the City's residents and businesses to help pay for the recovery - because the pain was spread. If only one group, or another had suffered, all hell would break loose, but the City had been prepared to sacrifice and this way it was perceived as fair. Of course Mayor Bloomberg was (for all intents and purposed) apolitical and did not have to conform to anyone else's platform. He has since abandoned both major parties (after having been registered as a Democrat and then a Republican) and become an Independent.
The frightening aspect of this matter is that, even here on Metar, with all of our attention to this stuff, when faced with the facts (not opinions) that Yoda has presented, there are still a handful who persist in arguing tangents.
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