DislikedDon't waste your time trying to convince others of those facts. The media and so called TV economists have convinced many of the exact opposite.Ignored
DislikedTo sisse:
Solving a fiscal problem is exeptionally difficult because it has to come at the expense of smth else in a zero sum economic world. If you cut spending you increase unemployment, and by raising taxes you are hardly raising tax revenues....
......How do i solve the fiscal problem in a country ? Of course, by cutting spending. But it's not positive for the economy, definitely not in the mid term. ONLY in the (very) long term once negative effects of reduced aggregate demand and perhaps a panic has been surpassed.
...So, a...Ignored
In the latter cases and in all cases before is too late (like in Greece,etc) , not taking the appropriate measure on time make compamies runaway and scare real investment. Just the expectation of a potential agreement only (which is not necessarily a real solution) is making markets rally non stop. An actual implementation will be very very positive for an Economy like the US ...
In economics and fiscal issues you can run but you can't hide, defaulting is extremely socially and financially costly (ask Greeks) and is only viable in desperation mode. In those cases, the effect on employment of public cuts can be devastating but that's the cost of mismanaging the economy for decades. That's not the case in the US. Cutting red tape, unnecessary Bureaucracy and targeted cuts that improve competitiveness in the private sector can have exponential positive impacts in the economy (killing 2 birds with one stone) when do it on time and with the proper mix and match between taxes and expenditures....
sisse
Pending conversations? PM for a chat...I am mainly in OTM now