August 1, 2011

Bottle This: ‘Small spending cuts to have little economic impact’

Filed under: Economy,Taxes & Government — Tom @ 2:01 pm

Save this for later when the blame game for the ongoing economic misery tries to shift it all to John Boehner and Republicans who, regardless of whether you think they did or didn’t fight hard enough, definitely ended up with something that doesn’t cut enough — and in terms of how normal people think, didn’t cut anything at all.

From Christopher Rugaber at the Associated Press, posted as a graphic (current link) in case he or his editors water it down later:

APonDebtDealSpendingImpact080111

Well, “big spending cuts” wouldn’t have more than a slight initial impact on growth either, while increasing it after a possibly rough quarter or two. Those who believe that statement lacks in compassion need to remind themselves that the so-called Party of Compassion (my *ass) has dragged us through 12 quarters of  Keynesian hell since the POR (Pelosi-Obama-Reid) Economy aka the Fear-Based Economy began.

As seen in the CBO’s report (final page), outlays will be $21 billion and $42 billion lower in fiscal 2012 and 2013, respectively, than the March 2011 baseline.

At the end, in reference to the possible “repeal of the Bush tax cuts” (really a tax increase compared to the tax system everyone has been used to for almost nine years), Rugaber quotes a Chase economist claiming that “cuts in federal spending and the end of the tax cut could reduce growth by about 1.5 percentage points in 2012.” Would that be enough to intimidate the revenue-raisers from ruling the day?

You would think not, but I just have one question:

Why are we allowing even a chance that it will happen?

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4 Comments

  1. You mean to tell me, none of these nitwits could find some fraud, waste and abuse in a budget this size so as not to cut 1% in the 2012 budget? Well, it doesn’t matter anyway, as soon as the downgrades occur, the cost of borrowing goes up so any savings real or imagined are gone. As the economy crashes and burns, all these people are going to find out that no one is buying those bonds and the Fed is forced to print money to fund government operations. It should be noted that when the government prints money to fund it’s operations, the devaluation of the currency is in fact a tax! I believe this was Obama’s plan from the beginning. No matter how pragmatic you are as to the wisdom of this debt deal to get us to the 2012 elections, the inescapable truth is the government is going to deficit spend on the order of $1 trillion a year indefinitely. Hyper-inflation is now unavoidable.

    Comment by dscott — August 1, 2011 @ 4:40 pm

  2. A POLITICIAN TELLS THE TRUTH AT LAST!

    http://bayourenaissanceman.blogspot.com/2011/08/politician-tells-truth-at-last.html

    Yes, that headline’s in capital letters. I wish I could make it appear on my readers’ screens in FLASHING NEON CAPITAL LETTERS three feet high! For the first time in my experience, I’ve heard a US Senator tell the truth about the budgetary mess, this country’s debt crisis, and what it means for our politicians.

    I can’t urge you too strongly to watch the WHOLE of the 27-minute video clip below. Senator Tom Coburn tells the exact and literal truth about the present situation. He pulls no punches, hides nothing, and lays out the facts for all to see and hear. This isn’t partisan politics; this isn’t electioneering; HE SPEAKS NOTHING MORE OR LESS THAN THE TRUTH.

    Watch, and listen. It’s worth every moment of your time – and yes, it is that important.

    If Senator Coburn were running for President, he’d just have earned my vote – because he’s the first politician on either side of the aisle who hasn’t lied or equivocated about, or tried to hide, the mess we’re in. He speaks truths we need to hear, and absorb, and act upon. If we don’t, we – and our children – are well and truly screwed.

    Video:
    http://www.youtube.com/watch?v=LrIquFjy-5w

    Comment by Greg — August 1, 2011 @ 5:16 pm

  3. $2.4 Trillion Would Be Largest Debt-Limit Increase in U.S. History

    http://www.cnsnews.com/news/article/24-trillion-would-be-largest-debt-limit

    Comment by Greg — August 2, 2011 @ 11:04 am

  4. [...] or three. Friday’s GDP adjustments alone probably shaved off a year. The debt deal’s near-term savings are little more than a rounding error. Obama’s clear intent to not let anything get in the [...]

    Pingback by BizzyBlog — August 4, 2011 @ 8:54 am

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