

Thoughts on the US Debt Downgrade - damoncali
http://leedsonfinance.com/2011/08/07/thoughts-on-the-downgrade-2/

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russell
These experts seem to be missing fundamental: You dont do huge amounts of
budget slashing in the middle of a recession. We dont need hundreds of
thousands added to the unemployed. Sure, we can trade priorities like trading
wars for infrastructure, but wholesale slashing just courts a depression. The
solution is to get the country back on its feet, and cut out the wasteful
wars. Then close the tax loopholes and get rid of the Bush tax cuts. At that
point we can tackle the debt reduction with a vengeance. Backloading the cuts
isnt just politics, it's also sound economics.

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dpatru
You're assuming that government spending is helping. What if it's the problem?
To illustrate, imagine a hypothetical country where 90% of the working
population is employed by the government to enforce needless bureaucratic
rules on the 10% of the population that is actually engaged in producing goods
and services people actually want. Because of the taxes needed to fund the 90%
and the onerous business environment, the country is in a recession. What is
the solution? (Hint, it's not to maintain government spending.)

A big government is a "luxury" that poor economies can't afford. This is an
old problem. Over two hundred years ago, Jefferson complained that the King of
England "has erected a multitude of New Offices, and sent hither swarms of
Officers to harass our people and eat out their substance."

