The ADP payroll estimate once again suggests we will see a modest 200K gain in private payrolls this Friday. We need much more than that to get the economy back on a healthy growth track. The economy has done most of its adjusting, but a pickup in the pace of growth is likely tied to progress in Congress on cutting back our bloated Federal behemoth. Congress, the world is waiting for you to come to your senses and make convincing cuts in the size of our government. If we can trim spending and cut corporate taxes to boot (just one example of positive tax reform), then we could see the budget deficit close on two fronts, as spending growth slows and revenue growth picks up.
If Congress fails to pass austerity measures this year (i.e., spending cuts), then the only remaining courses of action are default or inflation -- of course, the Congress will not allow a default to occur -- thus, inflation will be the outcome should Congress fail to enact meaningful reductions this year (and the next year, and the year after, and the year after that)...
ReplyDeleteQuestion is will the American people revolt when it becomes necessary to make draconian cuts?
ReplyDeleteWho's fault is this and who should pay?