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To: ChanceIs who wrote (147987)	3/23/2011 6:50:19 AM
From: Bearcatbob	8 Recommendations Read Replies (4) \| Respond to of 206200

Chancels, I no longer believe this deficit problem can be solved by economic growth alone. While economic growth makes a difference - the Simpson Bowles Commission was clear that far more is needed. The wingers on one side say growth will solve the problem. The wingers on the other side say taxes will solve the problem. There is a need to radically change the fiscal policy in Washington. With my friends I have called for a "grand compromise". I see now that Washington is using the phrase "grand bargain". I was close. Whatever it is called it will take pain from all to make all feel a sense of fairness. Some of this pain may be bad economic policy - but it will be necessary to get the nation to go along with it. bloomberg.com Bob

To: ChanceIs who wrote (147987)	3/23/2011 8:19:31 AM
From: Fiscally Conservative	3 Recommendations Respond to of 206200

Thank you Chancels for this post. It is my understanding that the US Economic growth has been financed on the back of the US Federal deficit! The United States government has implemented a 'fail policy' regarding 'stimulus packages' directed toward acheiving economic growth. Look at the past ten year's economic growth and then look at the federal account deficit within the same time frame. You would have to first subtract the deficit for each year before accurately measuring the economic growth. It is a complete failure. This does not even take into consideration the off-balance accounting that is not directly quantified. Our Federal Government accounting system is a sham! If the Federal Government were a publicly traded stock shareholders would have been wipe out long ago.

To: ChanceIs who wrote (147987)	3/23/2011 8:22:44 AM
From: carranza2	3 Recommendations Respond to of 206200

I don't believe the deficit growth vs. revenue growth argument takes into account QE2 which, in my view, is so analogous to federal spending that it should be considered as such. If the Treasury controlled the currency and engaged in QE2-like operations, there is little doubt that it would be considered an item of 'spending.' Focusing specifically only on these two items yields a false result for the totality of the picture is ignored. The rate of growth as well as the nominal growth of the money supply in the last few years has been phenomenal. The result is a devalued USD. Even if you don't adjust for inflation, the budget deficit is still enormous. Although I have not calculated it, I will be shocked if the rate of revenue growth if continued or even slightly improved will make any substantial dent into the debt which has been accumulated in the last few years. Doing so requires enormous budget cuts or huge tax increases. That is just not going to happen given the current political leadership on both sides of the aisle. In short it is likely that the budget deficits will continue. And if they do continue, how will they be financed? You got it, more public debt and and more printing and therefore more devaluation of the USD. This does not bode well for us. Gold and other hard assets have picked up the scent and are rising in value as a result. The Calafia Beach Pundit studied under Kudlow; I think he is indoctrinated in 'trickle down economics', the voodoo economics Geo. H.W. Bush properly decried when he ran against Reagan.