America’s Latest Phony Fiscal Crisis – Bloomberg 03-17-13

Salient to Investors:

Simon Johnson at MIT writes:

US rates on government debt are very low, the dollar is not depreciating rapidly, and inflation seems stable – no imaginable circumstance under which the US would need to borrow from the IMF.

Thomas Jefferson was obsessed with the idea that debt was bad and must be eliminated at all costs. In 1801, Jefferson embarked on a policy of cutting federal spending, including for the military.

The US budget deficit is caused by revenue falling below government spending – on the George W. Bush tax cuts, two foreign wars and the unfunded expansion of Medicare.

Health-care costs threaten to undermine competitiveness or even sink the economy. Shifting health care costs from the government to the private sector will increase overall health-care costs.

The sequestration program of across-the-board spending reductions undermines military readiness and cut essential programs that help poor children.

Read the full article at http://www.bloomberg.com/news/2013-03-17/america-s-latest-phony-fiscal-crisis.html

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