Automatic spending cuts

[xring]

Automatic spending cuts are less than two months away.
The silence in the press is deafening

My prediction

Lots of drama and fingerpointing ahead.
In the end a "compromise" (more debt)will be reached to avoid the "fiscal cliff", perhaps with another US credit downgrade and "market volatility"

Remember we are not even talking about balancing the budget here let alone reducing debt.

Thoughts?

[merl]

so let me get this straight.. the economy has been growing at barely 2% and there is this spending cut coming that will drop GDP by 5%. So the actual economy has been shrinking by 3% but for this wonderful printed money?

I just hope it doesn't turn into tarp 2.0. Take the same bill, cram it full of pork and suddenly it passes. Then again the toy arrow business needs another special law.

[xring]

so let me get this straight.. the economy has been growing at barely 2% and there is this spending cut coming that will drop GDP by 5%. So the actual economy has been shrinking by 3% but for this wonderful printed money?

So this would mean a economy shrinking by 6% with a balanced budget?
Which would shrink revenue by what half?
Which would mean a economy shrinking by 10% with a balanced budget and 25% of current spending ?
Is 25% of current spending enough to pay the interest on our 16 trillion debt?
16000000000000 x .03 = half a trillion which would leave half a trillion left to spend?
But wait that would mean 12% of current spending which would mean revenues of? economy shrinking by?
I would guess a balanced budget is not in our immediate future?
Perhaps the "fiscal cliff" is not such a misnomer after all?

[KestrelBike]

I gotta imagine that just to avoid a public panic (which neither the D and/or R fat-cats want), they'll pass whatever "deal" they can at the last minute and kick the can that much further down the road.

[Sawin]

Yep, should be an interesting time, 2013.

[hatidua]

I think each politician just wants to kick the can far enough forward so it doesn't affect their current job security. Kind of a "let the next guy deal with it", which our various leaders have been doing for as long as I can remember.