A Way Out Of the Budget Impasse

By Jul 13, 2011, 12:44 PM Author's Blog  

In a column posted today on Bloomberg Views I suggested a way to resolve the budget impasse. It starts with the fact that about $6 trillion in deficit reduction is needed over 10 years to get to balanced budget.The proposal is that the President and the Congress agree now to $2.5 trillion spending growth reductions and increase the debt limit by the same amount. The question about how to close the remaining $3.5 trillion gap–tax increases or more spending reductions–is then left to debate next year as part of the 2012 election.

This chart–which I have used before–shows the feasibility of the idea. In a speech on April 13 President Obama already suggested about $2 trillion in spending growth reductions. So we are almost there.

  • SHARE:
  • Share on StockTwits

One Comment

  1. blue magic says:

    obama doesn’t realize that any dept. ceiling increase regardless how large will be short term. america is burnin through so much cash so fast that u can’t really can’t print or borrow it fast enough.treasury will burn through 2-3 trillion in a year maybe two

LEAVE A COMMENT

SPY205.72  chart+0.75  chart +0.37%
GOOG711.12  chart+9.69  chart +1.38%
AAPL92.72  chart-0.52  chart -0.56%
TSLA214.93  chart+3.40  chart +1.61%
TWTR14.40  chart+0.28  chart +1.98%
BBRY6.69  chart+0.01  chart +0.15%
NFLX90.84  chart+1.47  chart +1.64%
FB119.49  chart+1.68  chart +1.43%

Nikkei16106.72  chart-40.66  chart -0.25%
UK6125.70  chart+8.45  chart +0.14%
France4301.24  chart-18.22  chart -0.42%
Germany9869.95  chart+18.09  chart +0.18%

EUR / USD1.1405  chart-0.0004  chart -0.04%
GBP / USD1.4431  chart+0.0001  chart +0.01%
CAD / USD0.7747  chart+0.0000  chart +0.00%
AUD / USD0.7367  chart-0.0000  chart +0.00%

Gold Fut1102.80  chart-5.30  chart -0.48%
Oil Fut46.97  chart+0.42  chart +0.90%