Saturday, March 12, 2011

Pat Toomey: How to Freeze the Debt Ceiling Without Risking Default -

The insanity of prophesying that the debt ceiling can be maintained by committing the United States to a path that may or may not work properly is beyond ludicrous - massive layoffs and cutbacks in government workers and programs.  You would think... but that theory may just work!

Senator Pat Toomey will very shortly introduce legislation that will, in effect, cut our decades long dependency of borrowing to cover the overspending that has been a integral part of the American economy for the last five decades - the Korean war veterans returning from the Korean conflict created a need to borrow and it has been the accepted thing to do every since.

Only a few months ago Britain embarked on this same surgical procedure with less than disastrous results!  The predictions by some that the British economy would collapse has not occurred, but the jury is still out, since the majority of the cuts won't occur until this time next year.

The Economist posted this article: So Far, so Good in which statistical data shows every indication that the policy is working, but as I said before, they have not gotten to the core of the new policy - massive layoffs and severe cuts in government spending.  The British plan is to make cuts equaling ten percent of the GDP over a four year period.  That is a significant reduction that would theoretically be the equivalent of cardiac arrest to an economy the size of Britain's, but contrary to 'the doom and gloom' that was predicted, the opposite is occurring.

Growth has been steadily improving for the last three quarters in direct contrast to predictions for Britain.  In summary, maybe the good Senator has it right and adopting  Britain's policy may be the right course for America as well.

In a democracy, silence is not golden; it is condonance in the face of injustices; it is fear, where the thought of reprisal fosters control – Rodney A. Davis

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