"There is an alternative, you know. Like cutting spending, which has grown by leaps and bounds under Bush"
Of course. But there is no way that spending is going to be cut by the required amount in a short period of time. It just isn't realistic.
"That should greatly overshadow the alleged negative effect (if there was any) of tax cuts."
Still in denial, I see. Well, we are in the first phase, the drop in the value of the dollar. If steps are not taken to contain that, in other words raising interest rates and taking steps to decrease the deficit, then we won't be able to sell our bonds any more. There are already signs of this happening. At that point, inflation takes off. Given the present attitudes, it is doubtful that wages will be raised to compensate for the increase in inflation, and that means we quickly progress to the stage where unemployment starts to climb along with the inflation because of a drop in spending. If there has been a cut in the deficit by this point, then the problem can be solved by jacking up interest rates and taking a hit of even higher unemployment. That won't be possible, so it will be put off for as long as possible. Of course, real estate will have tanked well before this point and those with out a fixed rate mortgage are going to be in real trouble.
There is no "alleged" when you talk about the negative effect of tax cuts. If it increases the deficit for any length of time, then the effects are negative. We've been down that particular road not all that long ago.
See the ruts in the road we are walking? |
