Monday, January 7, 2013

The chairmen of the Simpson-Bowles committee set up by President Obama to advise on the debt crisis, and whose recommendations the President then completely ignored, comment that the fiscal cliff deal was not even close to a solution to the problem of government spending.

In this, they appear to support Ron Paul's idea that the country has already gone well past the point of no return, fiscally speaking, and the debt incurred so far is simply too big to be paid back normally.   The likely method the politicians will use is inflation, which punishes savers and those on a fixed income, like retired people. The only other way is default, although the level of inflation that would be needed to make the weight of  the debt disappear is also a default of a different kind.

No matter how you slice it, there is no political will to do what is needed here, which means that some sort of nasty financial chaos is in our near future.  Plan accordingly.

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