Groundhog Day

They are doing it to us again.  But groundhog day is so fun, we just scratch the fuzzy critter on the head, snuggle up in our blanket, and go back to sleep for 6 weeks of winter.

Washington is about to add $900B to our unsustainable national bar tab through the great Obama tax compromise.  We are so aghast, dis-heartened, and pissed off, that we have not quite yet figured out why we feel sort of good about it.

  • Unfunded tax cuts
  • Increased subsidies
  • Reduced revenue into an un-funded social security
  • Completely ignoring “pay-go” for the 29th time since adoption

We’ve just witnessed the pinnacle of incompetence in Washington.  They are about to do, what we told them explicitly not to do on Nov 2nd, and they are trying to convince us that it’s in our best interests.

In the inaugural event today of the “No Labels” organization in NYC, Evan Bayh relayed an anecdote about the decline of America.  I’m going to paraphrase.  He said that as a member of congress you see things that the average American does not see.  For example, secure transcripts of the private meetings Chinese politicians.  He said, the Chinese talk quite openly in private about the decline of American power and prosperity.  They wonder and laugh at us for not focusing on the right things, and how destined we are for sovereign bankruptcy.

While our insight into their conversations certainly required spy camera’s and human assets on the ground, their intelligence only required a cable subscription for C-SPAN.

Is anyone paying attention?

Guest Blogger Jeff

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One response to “Groundhog Day

  1. Actually I think unemployment is the big problem, and the real issue in the back of peoples’ heads once you get beyond the talking heads, folks with axes to grind, etc.

    As for the deficit – Just unbelievable that within weeks a conversation can mutate from discussion on the recomendations of Simpson’s committee to a significant fiscal give away.

    Now I am not sure we should go overboard with austerity (show me a country where that worked within say a 2-year time frame with any positive impact?), but we need to start thinking about curtailing this deficit.

    Since there are two wars, we probably should allow top rates to rise to pay for them. It would help if we could fight them more competently, or had chosen to pick our battles more carefully, but Iraq may be winding down satisfactory. Not sure we need to lower social security/payroll taxes either.

    As for the Chinese, they should be feeling their oats (they achieved a lot in 30 years), but the root of their prosperity still lies with exporting to America (yes they have other trade partners, but they are buying treasuries for a reason).

    One thing you didn’t point out – The private sector probably shouldn’t have distorted businesses/operations in favor of financial services so much. Essentially handed enormous competitive advantages (with building capacity, skills base, transfering technology) to the Chinese, while pursuing financial engineering and aggresive trading. That is probably the keystone to providing China a comparative advantage of sorts; and fundamental weakening of the US’ economic base.

    I thought it interesting that GE is emphasizing industrial engineering, high technology, etc. for growth.

    As for the indebtness to China, well from some reason neither party seemed to have care for 30 years, spanning different administrations. The embrace was first with Japan, and then we replaced one “we import your stuff, you buy our debt” death embrace with Japan, for another, with China (which has a nominally totalitarian ideology, authoritarian government and military with adversarial contingency plans).

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