tag:blogger.com,1999:blog-9716997.post2311102185962316278..comments2024-03-15T23:30:38.471+11:00Comments on Lindsay's Lobes: An inconvenient economic truthLindsay Byrneshttp://www.blogger.com/profile/11030132436987752741noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-9716997.post-86780206422607325332011-08-11T17:31:35.240+10:002011-08-11T17:31:35.240+10:00Hi Susan,
Thanks for your comment. As I alluded...Hi Susan, <br /><br />Thanks for your comment. As I alluded to in my post what has happened is that long term bond yields have continued to slide in the face of a minor rally. Investors seem willing to provide the US government with 10 year funding at a yield that doesn’t even cover inflation- it is hard to believe but that is the reality. The US 10 year Note yield is now hovering at a 40 year low and may even go lower. <br /> <br />Hence if the US government debt burden was about to become a real threat to the broader economy, interest rates (or yields) would have risen not fallen to see a result similar to what has occurred in Greece, Portugal etc. The fact they have fallen rather than spiked gives short shift to the fears of an imminent fiscal “crisis”. What it really indicates is a stagnant economy which not going to grow much until the debt overhang reduces to a more sustainable level. <br /><br />Restoring equity and reform into the tax situation in my view is not all that complicated. It is interesting to note the Bush tax cuts expire across all tax brackets on January 1, 2013- and they are worth about $3.6 trillion over 10 years. Before those tax cuts the US was already a low tax country. If all else fails and that kicks in from 2013 that would actually start to reduce the debt in a timely fashion. <br />Best wishesLindsay Byrneshttps://www.blogger.com/profile/11030132436987752741noreply@blogger.comtag:blogger.com,1999:blog-9716997.post-77387971894815135772011-08-10T11:26:21.358+10:002011-08-10T11:26:21.358+10:00Hi Lindsay,
This is a very well thought out and co...Hi Lindsay,<br />This is a very well thought out and considered evaluation of the current financial circumstances. I wish I believed that things would clear through the efforts of sober and principled professionals.<br /><br />However, the rating agencies are corrupted. The point was to blame lack of new taxes.<br /><br />The US can't implement new taxes without crashing the tax base unless they accelerate monetization, in which case real tax receipts will fall. I'm not sure if this is a tragic mistake or exactly what they wanted.<br /><br />"And remember, where you have a concentration of power in a few hands, all too frequently men with the mentality of gangsters get control"<br />~ Lord Actonsusanhttps://www.blogger.com/profile/16747450215034568033noreply@blogger.com