A comment I made on Jim Sute’s blog here.
Here’s what I said:
Nice post Jim. We appreciate you writing and giving us Econ types a place to comment.
You are right about the super-committee. We saw what happened with the deficit commission. The commission never actually issued a consensus report because they couldn’t agree (even though the press often refers to Simpson’s report as the commission report). Same deal with this new committee I would bet. And you’re right, they don’t have force of law. Just another committee…
These budget ideas are good ones. The only concern I have is that you say “knowing we are broke.” I know it is all through-out the press but it seems to be the kind of news that sells papers and TV shows.
I don’t believe we are broke. It’s Pete Petersen and the Repubs scare mongering. They are not stupid they know that if folks are scared they will agree to anything. However we could be broke someday if we really worked at it. But we must remember, we the people have the power. Nowhere in our constitution does it say we need to have money to vote. So, we the people could, if we wanted to, tax the crap out of everyone starting tomorrow and be debt-free in a year. I don’t think being broke is the issue.
Unfortunately most of the budget and debt reporting only focuses on our liabilities and not our net worth. We could spend $1 trillion dollars building buildings this year and the entire amount would come off this years budget even though this property would have an expected life of 30+ years. Before knowing we are broke we should consider the assets we own collectively; $1.6 trillion in Gold, Forex Bonds, and Oil reserves, leases, etc. Some 1.2 million buildings and 650 million acres of land yada yada. Not to mention the bridges, roads, dams and planes, weapons. The bond markets know this, T-bonds went up when the S&P downgraded.
The Repubs have done a disservice to the American people in their attempts to oust Obama. They are very clear in their goal to be obstructionist. They only want Obama out and they don’t seem to care about their constituents or they see their constituents as big money.
My prescription is to balance the budget of course, but not now. We are not broke and since we are sovereign and have our own currency we are extremely creditworthy. We just need some cooperation in Congress and the economy, like a big jet that needs folks calmed down so it can raise up off the runway and fly!!!! The voters need to go to the polls in 2012 remembering the game of “chicken” Cantor, Boehner, Ryan et al played with their economic future.