Skip to comments.A Republican Sellout Invites Stagflation
Posted on 12/26/2012 7:03:20 AM PST by SeekAndFind
While it may not be a surprise that the Republicans are preparing to yield on their vow to oppose tax hikes, it should raise investor concerns the world over that an upcoming budget agreement will likely involve a Congressional surrender of its authority to set the federal debt ceiling. In exchange for this, it appears that the Republicans have simply done nothing to halt, or even curb, the dangerous federal spending trajectories or the current drift towards greater state control of the economy. President Obama has politically outmaneuvered the Republicans, even going as far as evoking the Newtown massacre as a reason for quickly concluding a deal. As a result, it is likely that the GOP will bear the blame for any breakdown in fiscal cliff negotiations. They could wear such an outcome as a badge of honor, but nothing indicates that they have the political courage to do so.
Given the drift in Washington, those who had hoped for a significant improvement in the United States fiscal prospects will have nothing but lumps of coal in their Christmas stockings. At the same time, the Fed continues to hold its foot to the floor with increased quantitative easing that will pump massive liquidity into the system (see Peter Schiff's latest commentary for more on this). The combination can lead to stagflation and a debased U.S. dollar.
Republican House Speaker John Boehner has indicated a willingness to accept new taxes of $1 trillion, despite his party's pledge to halt tax increases. Diverting a trillion dollars out of the wealth-generating private sector into the government's coffers can only hurt corporate investment, particularly the venture capital sector that is so vital to the flow of new ideas and technology that stand at the core of America's highly profitable international technological lead.
(Excerpt) Read more at realclearmarkets.com ...
If the all knowing MSM think that Obozo wants to 'go over the cliff' so that he can be a Hero by proposing a tax roll back for some bands in the New Year, why don't the Idiot Pubbies beat him to the punch and INSTANTLY as soon as the new House is sworn in, propose a roll back for all bands and become Heroes themselves?
Instead of playing a lousy Defense, go on to Offence
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