« The US Fiscal Cliff | Main | Happy New Year »

02 January 2013

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Andyinfo

A picture tells a thousand words. Thanks Terry I thought I had gone mad reading the financial news over the last few days.

John Healy

Graphic! Pictures are worth a thousand words. Hope 'Houston' is logged on - even 'switched on'.

redrum

One small step for grandstanding; one giant step for total fiscal collapse. The US is in a worse situation that we are, which is really saying something. Prediction is greater and greater financial repression of peoples by politicians. Given that nearly 50% of the population are the recipients of taxpayer's money, and turkeys don't vote for Christmas, the only outcome can be the breakdown of the social cohesion that's left.

Andrew

I have mixed views on this. As I've mentioned before, the number on the right is alarming but somewhat misleading: a large part of it is cyclical and you should instead be looking at the structural component which is considerably less but more concerning. Similarly, you're not expecting the number on the left to be the same as the one on the right - if it were, that would have had a worse effect on the economy than if we had just gone over the cliff. On the upside, targeting the tax increase at top income earners is less likely to have a negative impact; on the downside, making most of the Bush Tax Cuts all but permanent will do more damage to the structural deficit.
On balance: somewhat disappointing.

John pd

Hi Terry, happy new year.

A devastating article I've just read.

Our fiat money system contains within it the seeds of it's own inevitable destruction.

www.mises.org/journals/qjae/pdf/qjae14_4_1.pdf

We live in interesting times.

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