Not really. You and I had this debate in the past. At that time, you had suggested that you were in favor of going over the cliff. I'll tell you why I don't think that's a good idea. Going over the cliff will contract GDP by 3-4%, at the minimum, because it would increase taxes and cut spending, for a combined $600B in 2013. GDP is at $15T. So the math is clear. We'd be in a severe recession if we go over the cliff.
Now, I've prepared my portfolio for a recessionary outcome in the next few months. However, if I were King, I'd create a plan for cuts that get progressively larger year by year over the next 10 years, so that in year 10, it results in a balanced budget. And I'd make it so that a 2/3rds majority in Congress would be required to overturn that plan. Lastly, I'd make it 50/50 in terms of tax hikes and spending cuts.
I like a gradual 10 year plan, because it would get us on a sound footing without having to go through immediate austerity, calamity, and shocks to the system. However, given what I see out of Congress, where they play games like saying, "we'll make cuts from anticipated spending increases", which is like me saying to my wife I plan to save money by not buying the 10 Ferraris that I wanted to buy next year. That's just s stupid game. I want real tax hikes and real cuts from today's budget, not from some fantasy in the future.
So that's why I'm prepared for the worst case scenario. In today's world, you have to assume we have idiots for leaders, who kick the can down the road and try to sell it to us like we're the idiots like we don't know the games they play. |
