01-27-2012, 05:27 PM
Yes but then how long does it take the economy to catch up to current spending? I think the question is how much debt can we continue to wrack up.
If we can wrack up enough debt to simply freeze the budget and let the economy catch up, then there's no need for big spending cuts and maybe we'll see that 20,000 Dow after all -- no government bubble burst.
If we'd crash and burn with that plan (too much debt / people stop investing in the dollar / Euro suddenly looks really good? maybe this is far fetched) then we have to do some pretty giant cuts and that's the government bubble burst and we might be really happy to see the Dow stop falling at 8000 as literally $10 trillion over 10 years is lost (in the form of yanked deficit spending).
If we can wrack up enough debt to simply freeze the budget and let the economy catch up, then there's no need for big spending cuts and maybe we'll see that 20,000 Dow after all -- no government bubble burst.
If we'd crash and burn with that plan (too much debt / people stop investing in the dollar / Euro suddenly looks really good? maybe this is far fetched) then we have to do some pretty giant cuts and that's the government bubble burst and we might be really happy to see the Dow stop falling at 8000 as literally $10 trillion over 10 years is lost (in the form of yanked deficit spending).