Hello EP, <<... both Republicans and Democrats will want to pull in excessive Federal government spending after election, and back off on tax cuts to some degree.>>
... I believe it is still too early for sincere search and reach for true solutions. I believe debt will continue to rise even as taxes will stop falling and start to also rise, because there is still so much spending to be done yet.
<<Add in economic recovery and some inflation>>
I think there is no economic recovery in the absence of debt and refi, and there will be even less false recovery given the eventual but soon-enough feed-through of undeniable inflation.
<<tax revenues will be up>>
... yup, I am figuring on this, because of inflation, and because of spending, making all poorer, reinforcing inflation, driving up rates, or crowding out true wealth.
The exact sequence or method/process of making all poorer will make no difference to the inevitable outcome. We fry either way.
<<... the moves of the US Dollar over the past year will reduce the trade defict>>
... I am guessing that current buyers becoming poorer will do the job that a declining USD had obviously not been able to do.
Given the size of the apparent housing bubble resting on top of a debt bubble, squeezing in an equity bubble, and about to puncture a mythology bubble, the inevitable pop will be inspiring.
<<The next recession will be very nasty, because there is less ammunition to fight it>>
... and here we agree again, but perhaps the terminology will be "depressive stagdeinflation post-bubble syndrome"
We know how such diseases feel out in my neighborhood, and it is unlikely to be a festive episode.
Chugs, Jay |
