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Investment Analysis Clubs / Macro Economic Trends and Risks
|Subject: Re: The Fiscal Cliff-Solving the wrong problem||Date: 11/14/2012 2:58 AM|
|Author: RaptorD2||Number: 408429 of 478146|
I think that comparing a company's expense requirements with that of a nation is a non sequitur. What the administration may be thinking (and maybe not if I'm wrong) is that if part of the future economic solutions which we all know will become necessary if we are to avoid financial genocide, part of a real, lasting solution is a trick--also a necessity--requiring bringing the citizens on board. IF you are a congress critter and IF taxes need to be raised eventual and IF some entitlements need to be trimmed, it will be much easier, IMO, to bring the citizenry on board if these issues are on the table with proposed solutions, than if nothing is done about some of these 'smaller' issues which stick in the collective popular mind, e.g., equal tax rates for all, or at least not lower rates for the uber-wealthy.
If these 'little discrepancies' and a few others like it are not addressed now, then it will be nigh impossible to get the required popular base on board to bring pressure to the PTB to address the serious and more painful issues permanently so we can move on and have a plan for the future. Plans where banks, corporations, investors and employees of all kinds have the information necessary to make accurate planning possible. Without that information, companies will spend less, employ fewer workers, citizens will buy less and governments will build and repair less infrastructure, and our economy will be less likely to recover. Methinks the success or failure of each of these issues will greatly affect our economic health for years to come, even up to the level of GDP.
We can go the Greek way and force pain on those who perceive they can at least afford the pain, or we can bring the population on board and make them at least THINK they/we are part of the solution and not bearing the brunt of the pain required to move ahead.
I think the latter way would be much easier. On the other hand, I have no plans to run for office either. That said, I think for a politician with cojones that a balanced budget plan, a revenue neutral plan for new legislation, etc. (plans that would actually help us avoid another 2008 meltdown and bailout) would be easy arguments to not only not hide from the voters, but actually employ to build one's entire platform on to run for office. This guy has my vote. But does he exist? Will he soon exist?
Most Americans KNOW there is need for fundamental change. Most people KNOW there is need for some level of pain to get there. They just want the pain to be spread out a little in a somewhat equal manner. Kinda like taxes. See? They're all tied together. Meanwhile, the PTB are playing games at each other's expense. Frankly few of the rest of us would care, except for one thing. Regardless of which side might receive more pain right now, the real, longer-term pain is going to be transferred (and I don't mean 'trickle') right down to the tax payer.
The voting public is not hyper aware of the issues, I suspect we could all agree on that. But they are not sheep either, at least not when there way of life is threatened en masse. So we have 99% with little power vs. 1% with 70% of the country's wealth. The worse things get out of balance economically, the more the tipping of the scales will weigh in favor of the 99%. Revolutions are made of these very things.
So where's the tipping point? At what point do we collectively wake up? I don't know but I think we're closer to being there than ever before in my lifetime. And against all odds, that actually gives me hope.
No, the cliff itself is not THE problem. But PERCEPTION of the cliff and our reactions to it could quickly become exactly that. That can we kick down the road is growing like a killer snowball. Worse yet, it has the power to wipe out much more than a few individuals. Ah, if only it were heading only for D.C. but whose willing to bet on that happening?
And if worse comes to worst, the American Spring will happen. The very phrase sounds at once pleasant, scary and contradictory. But then so do the problems within our economic landscape.
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