Best of the Week
Most Popular
1.Ukraine Preface, the Emerging Dynamics Of Petro-Yuan Standard - Jim_Willie_CB
2. Speculations Reversed - Gold Price Stealth Rally 2014 - Peter_Schiff
3.Bubbleberg News Drivel Masquerading as Financial Reporting - David A. Stockman
4.Nationwide UK House Prices 9.5% Inflation, Housing Market on Steroids, Help to Buy Anniversary - Nadeem_Walayat
5.How to Profit from Palladium Huge Price Surge… - Peter Krauth
6.UK Home Solar Panel Installations Good or Bad for House Buying and Selling? - Nadeem_Walayat
7.Global Gold Manipulation Update - MAP Wave Analysis - Marc_Horn
8.Ukraine Capital Controls and 200% Inflation But Still In Better Shape Than US! - Jeff_Berwick
9.The Rise of a Euro-Chino-Russian Superpower - Stephan Bogner
10.Across Europe Secession Movements Intensify - BATR
Last 72 Hrs
10 Ways to Screw up Your Retirement - 17th Apr - 14
One of Harry Dent’s Three Keys to Market Prediction is Cycles - 17th Apr - 14
Obamacare Proof Stocks - 17th Apr - 14
Gold, Silver And The Mining Sector: Prepare For A Severe Fall - 17th Apr - 14
Hidden Australian Life Sciences Bio-tech Growth Stocks - 17th Apr - 14
Disrupting Big Data Status Quo - 17th Apr - 14
What the Stock Market Bears Have Been Waiting for... - 17th Apr - 14
Copper Is Pathological and Suffers from SAD, but It Has Value - 17th Apr - 14
Old World Order New World Order, Chaos And Change - 17th Apr - 14
Even The US Government Will Abandon the U.S. Dollar - 17th Apr - 14
Gold - Coming Super Bubble - 17th Apr - 14
Glaring Q.E. Failure Spotted - Money Velocity Is Falling Rapidly - 16th Apr 14
High-Frequency Insider Trading - 16th Apr 14
Gold Prices 2014: Do What Goldman Does, Not What It Says - 16th Apr 14
These CEOs Will Make Investors Rich - 16th Apr 14
Climate Change, Central Banking And The Faustian Bargain - 16th Apr 14
Every Central Bank for Itself - 16th Apr 14
Social Security, U.S. Treasury Stealing Every Last Penny From Americans - 16th Apr 14
Ukraine Falling to Economic Warfare and Its Own Missteps - 16th Apr 14
Silver and Gold Miners Still Disappoint - 16th Apr 14
Silver, Gold, and What Could Go Wrong - 15th Apr 14
How I Intend to Survive the Meltdown of America - 15th Apr 14
France Wakes Up To The Multicultural Multi-Threat - 15th Apr 14
The Real Purpose Of QE - It’s Not Employment - 15th Apr 14
Peak Coal - 15th Apr 14
Flash Crash, Rigged Markets - What’s the Frequency Zenith? - 15th Apr 14
Forecasting U.S. GDP Growth: A Look at WSJ Economists’ Collective Crystal Ball - 15th Apr 14
Stock Market - Is Something Nasty About to Happen? - 15th Apr 14
How to Trade Your Way To Freedom - 15th Apr 14
Understanding (and Ignoring) the Media Bandwagon Against Gold - 15th Apr 14
When Stock Market Bubble Crashes, Take Refuge in Gold Stocks - 15th Apr 14
Bitcoin Price Strong Appreciation to Be Followed by Declines? - 14th Apr 14
Greece, Turkey, We're Shuffling The Cards on Our Europe Investing Play - 14th Apr 14
Silver Price Ultimate Rally: When Paper Assets Collapse - 14th Apr 14
Get Your Share of an Extra Trillion Euros Money Printing - 14th Apr 14
Fourth Reversals in The Gold and Silver Charts - 14th Apr 14
Stock Market Nearing Rally in a Downtrend - 14th Apr 14
London House Prices Bubble, Debt Slavery, Crimea 2.0 - Russia Ukraine Annexation - 14th Apr 14
Four Horsemen - Top Economists Explain the Source of Our Economic Crisis - Video - 13th Apr 14
Peak Oil And Global Warming – A Question Of Culture - 13th Apr 14
The Global Banking Game Is Rigged, and the FDIC Is Suing - 13th Apr 14
College Degree Earnings Propaganda - 13th Apr 14 - Andrew Syrios
Stock Market Potential Diagonal Triangle Pattern Forming - 12th Apr 14
Ukraine Crisis – Military Flash Drive Thinking - 12th Apr 14
Gold And Silver – 2014 Coud Be A Yawner; Be Prepared For A Surprise - 12th Apr 14
Gold Preparing to Launch as U.S. Dollar Drops to Key Support - 12th Apr 14
Manipulated Stocks Markets And The Empty Bag - 12th Apr 14
Stock Market - It’s Not Time to Panic… It’s Time to Buy - 12th Apr 14
Doctor Doom on the Fiat Money Empire Coming Financial Crisis - 12th Apr 14
Sheffield, Rotherham Roma Benefits Plague, Ch5 Documentary Gypsies on Benefits & Proud - 11th Apr 14
This Bitcoin Price Rally Might Be a Fake One - 11th Apr 14
GDX Gold Stocks Benchmark - 11th Apr 14
Silver Price Finally Outperforms – How Bullish Is That? - 11th Apr 14
Limits to Employment Participation, and Societal Change - 11th Apr 14
US Moves To Restrict Travelers Taking International Flights - 11th Apr 14
Bill Gross to El-Erian: 'Come on, Mohamed, Tell Us Why' You Resigned PIMCO - 11th Apr 14
British Pound GBP/USD - Double Top or Further Rally? - 11th Apr 14
Don't Miss the Boat on Big Biotech Catalysts: Keith Markey - 11th Apr 14
Russia Invaded Crimea and These US Energy Companies Made a Killing - 11th Apr 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Washington Debt Compromise Spells Death Knell for U.S. Economy

Politics / US Debt Aug 05, 2011 - 01:34 PM GMT

By: Casey_Research

Politics

Vedran Vuk, Senior Analyst, Casey Research writes: With a last-minute debt deal reached, I’m reminded of two holy words in Washington: “compromise” and “bipartisanship.” It’s amazing that the political elite have so twisted the English language as to lend virtue to these terms. In Washington, these words hold intrinsic value… similar to how “truth” and “honesty” do outside D.C. Unfortunately for the American public, Washington compromises have been and will continue to be the death knell of the U.S. economy – and particularly the free market.


Rarely does compromise ever benefit the small-government side of the argument. Instead, compromise increases the size of the state step by step. For example, suppose the left wants $2 billion for organic school lunches. Of course, the free-market guys are against this bill; they want $0 dollars in extra spending. So, what’s the compromise? The two meet at $1 billion.

But this only makes one side better off. In a true compromise, each side would get something. In this case, spending grows by $1 billion, and the small-government side gets nothing from the deal. Future spending was simply reduced from $2 billion to $1 billion. The small-government advocates are further away from their goal than they were prior to the deal. In a way, this really isn’t a compromise at all.

One could think of similar examples to prove the point. Suppose someone wanted to put ten drops of arsenic in your food. Does negotiating the person down to five drops improve the situation? No, it doesn’t. That’s exactly how America has been poisoned over time. Sometimes the dosages are smaller, but it’s the same lethal stuff for our long-term fiscal situation.

This happens with regulation as well. Think about the Dodd-Frank Act. The financial industry has been fighting tooth and nail first with Congressmen and now with the government bureaucrats implementing the law to reach a compromise on the particulars of the law. But it’s not a compromise where the financials win: Rather, it’s a battle to lose less. “The struggle to lose less” has become the definition of a Washington compromise.

A real compromise would involve a tradeoff where both parties gain. For example, regulations could be increased on derivatives, with deregulation occurring in other parts of the financial sector. Trust me; there are plenty of harmful regulations on the books. Each party gains something and trades something else. That’s how compromise works in the real world.

But don’t expect to see this happen anytime soon – at least not in regard to the free market. In reality, these tradeoffs do happen. However, it works more like this: “I’ll sign your war spending bill if you sign my local pork stimulus bill.” Sure, that’s a real D.C. compromise – and a third party is the real loser, i.e., the American taxpayer.

[These kinds of compromises have also allowed the political leaches to bleed your bank accounts. Read this free report to learn all about it and to start profiting from it.]

© 2011 Copyright Casey Research - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014