I read an article in the Nov. 26 issue of The Economist, titled "A downgrade for Congress".
It begins: "It was not a very ambitious target. All that the congressional "supercommittee" was required to do was to figure out a list of measures that would reduce America's budget deficits by $1.2 trillion over the next ten years. That sounds like a lot, until you realise it is only 0.6% of GDP, not even a quarter of the $5 trillion or so that is really needed to right the books in Washington, and less than 3% of the $44 trillion that the federal goverment is expected to spend over that period. To reach a goal that a business cost-cutter would regard as desultory, the bipartisan committee of 12 senators and congressmen was accorded exceptional powers. Its work was to be subject to a simple up-or-down vote, with no possibility of amendment; and the Senate would not be able to use its power to filibuster. Yet on November 21st, after three months of deliberation, the team was forced to admit that it had failed."
And the Blame Game kicked into high gear, the Democrats blamed the Republicans, the Republicans blamed the Democrats and the public was left shaking our collective heads at the degree of dysfunction we witness daily amongst our elected officials and the partisanship which has been elevated to a new level.
The article concludes with one suggestion why the supercommittee might have failed to meet its goal = no real sense of urgency. "America is not Italy: this week, its ten-year government bonds were trading at well below 2%, the lowest levels for over half a century ..."
Which brings me to the last point I wanted to make regarding the "Blame Game."
I was thoroughly disgusted with all the blame being heaped upon little ole Greece during the summer and early Autumn. Yes, the Greek politicians had managed (mismanaged sounds better) to completely over-leverage their country and had dug a massive hole for themselves -- and the various bankers were all-too-happy to saddle them with bailouts, which, it should be pointed-out, are not "gifts", but rather additional loans with crushing terms. Massive austerity measures were depressing everything and everybody in Greece and the rest of the world was using it as a scapegoat for the mess the Europeans were finding themselves in ... blame it all on the Greeks!
That's where the other shoe dropped. Wait a minute ... perhaps Italy has an economic problem, oh and Spain too. Italy isn't a small economy, like Greece, they are the #3 economy in the Euro zone.
Now all of a sudden the European economic powerhouses are calling an emergency meeting early next week to figure a way out of the looming economic meltdown ...
I wonder who will be blamed next.
More importantly, I hope the Blame Game stops and we start seeing the politicians and the bankers working cooperatively to bring the world economy back to health.
It begins: "It was not a very ambitious target. All that the congressional "supercommittee" was required to do was to figure out a list of measures that would reduce America's budget deficits by $1.2 trillion over the next ten years. That sounds like a lot, until you realise it is only 0.6% of GDP, not even a quarter of the $5 trillion or so that is really needed to right the books in Washington, and less than 3% of the $44 trillion that the federal goverment is expected to spend over that period. To reach a goal that a business cost-cutter would regard as desultory, the bipartisan committee of 12 senators and congressmen was accorded exceptional powers. Its work was to be subject to a simple up-or-down vote, with no possibility of amendment; and the Senate would not be able to use its power to filibuster. Yet on November 21st, after three months of deliberation, the team was forced to admit that it had failed."
And the Blame Game kicked into high gear, the Democrats blamed the Republicans, the Republicans blamed the Democrats and the public was left shaking our collective heads at the degree of dysfunction we witness daily amongst our elected officials and the partisanship which has been elevated to a new level.
The article concludes with one suggestion why the supercommittee might have failed to meet its goal = no real sense of urgency. "America is not Italy: this week, its ten-year government bonds were trading at well below 2%, the lowest levels for over half a century ..."
Which brings me to the last point I wanted to make regarding the "Blame Game."
I was thoroughly disgusted with all the blame being heaped upon little ole Greece during the summer and early Autumn. Yes, the Greek politicians had managed (mismanaged sounds better) to completely over-leverage their country and had dug a massive hole for themselves -- and the various bankers were all-too-happy to saddle them with bailouts, which, it should be pointed-out, are not "gifts", but rather additional loans with crushing terms. Massive austerity measures were depressing everything and everybody in Greece and the rest of the world was using it as a scapegoat for the mess the Europeans were finding themselves in ... blame it all on the Greeks!
That's where the other shoe dropped. Wait a minute ... perhaps Italy has an economic problem, oh and Spain too. Italy isn't a small economy, like Greece, they are the #3 economy in the Euro zone.
Now all of a sudden the European economic powerhouses are calling an emergency meeting early next week to figure a way out of the looming economic meltdown ...
I wonder who will be blamed next.
More importantly, I hope the Blame Game stops and we start seeing the politicians and the bankers working cooperatively to bring the world economy back to health.
