Best of the Week
Most Popular
1.UK House Prices BrExit Crash NOT Likely Despite London Property Market Weakness - Nadeem_Walayat
2.BrExit Morning - New Dawn for Britain, Independence Day! - Nadeem_Walayat
3.LEAVE Wins EU Referendum - Sterling and FTSE Hit Hard, Pollsters, Bookies and Markets All WRONG! - Nadeem_Walayat
4.BrExit Implications for UK Stock Market, Sterling GBP, House Prices and UK Politics... - Nadeem_Walayat
5.Trading BrExit - Stocks, Bonds, Sterling, Opinion Polls, Bookmaker Odds and My Forecast - Nadeem_Walayat
6.FTSE and Sterling Brexit Trading, Deconstruction of the EU Referendum Result - Nadeem_Walayat
7.UK Interest Rate Cut to 0.25% Imminent and More QE Money Printing - Nadeem_Walayat
8.Trading BrExit - British Pound Plunges, FTSE Stock Futures Slump on LEAVE Shock Referendum Win - Nadeem_Walayat
9.The Stock Market is Reading it Wrong! - Chris_Vermeulen
10.Breakouts Galore in Gold and Silver - Jordan_Roy_Byrne
Free Silver
Last 7 days
Stock Market Insiders Are Secretly Selling, Cycle Top Next Month - 28th July 16
FOMC Interest Rates and Their Impact on the US Economy - 28th July 16
The State Of The Economy - 28th July 16
Elliott Wave Crash Course - 3 Ways the Elliott Wave Principle Enhances Your Trading - 28th July 16
Japan's "Helicopter Money" Play: Road to Hyperinflation or Cure Debt Deflation? - 27th July 16
Monetary Zika - The Insidious Nature of Credit Expansion - 27th July 16
Gold and Pork Bellies - 27th July 16
Silver Is Insurance Against The Worst Part Of This Depression - 27th July 16
Don’t Buy The SPX Hope Stock Market Rally! - 27th July 16
Bitcoin $650 Still in Play - 26th July 16
Deutche Bank Stock Price Crash - The EU Has Problems Far Beyond the Brexit - 26th July 16
The Forex Markets Are Getting Exciting! - 26th July 16
Underpriced Silver Is the “Rip Van Winkle” Metal - 25th July 16
Declines in Multiple Market Indexes - 25th July 16
Retailers Are Doomed as Most Americans Are Too Poor to Shop - 25th July 16
Here’s One Currency That Could Go to Zero - 25th July 16
Stock Market Top is Expanding - 25th July 16
Silver Manipulation – Because They Needed the Eggs - 25th July 16
Silver Market COT Stuns: What's Going On Here? - 24th July 16
Gold Demand Remains Stable During Sector Weakness - 24th July 16
Sernova, Diabetes and Haemophilia - 24th July 16
Russia: Tensions, Turmoil, and Western Hubris - 24th July 16
Soybean Commodity Price to Soar Again - 23rd July 16
SPX Stock Market Uptrend Continues - 23rd July 16
Gold And Silver – Debt Addiction Will Carry Precious Metals Higher, Guaranteed - 23rd July 16
Pokemon Go - How to Play, First Use, Balls, Stops, Catching Pokemon's... Great Excercise! - 23rd July 16
7 Signs That the Gold Market Remains Resilient - 23rd July 16
Basic Income in The Time of Crisis - 23rd July 16
Silver Bull Faces Correction - 22nd July 16
The Serious Warning No One’s Talking About - 22nd July 16
Stock Market Insight from Greed, Volatility, and Put/Call Ratio - 22nd July 16
What Will Happen To the Stock Market When Interest Rates Rise? - 22nd July 16
How to Escape the World’s Biggest Ponzi Scheme - 22nd July 16
Addicted to Debt - We Can’t Borrow from the Future Anymore - 21st July 16
Not Everything Is Bullish for Gold - 21st July 16
Don’t Get Sucked Back Into the Stock Market - The Big Picture Hasn’t Changed - 21st July 16
Silver – Caught Inside - 21st July 16
Forex: "The Markets Are Getting Exciting!" - 20th July 16
China Economic Troubles - Is Kyle Bass Finally Getting His Revenge? - 20th July 16
Why Lithium Will See Another Price Spike This Fall - 20th July 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The Power of the Wave Principle

U.S. Fiscal Cliff, Politicians Playing Chicken

Politics / Taxes Nov 29, 2012 - 06:04 AM GMT

By: Bloomberg

Politics

Bloomberg Television's Trish Regan sat down with four of the nation's brightest business minds to discuss their solutions for avoiding the fiscal cliff:

  • Former Treasury Secretary LARRY SUMMERS

  • Kynikos Associates President JIM CHANOS

  • Cantor Fitzgerald CEO HOWARD LUTNICK

  • Former Army General WESLEY CLARK


Video--Summers discusses whether U.S. debt could be downgraded again:

The Street Smart "Fiscal Cliff Summit, a one-hour special report, airs tonight at 8pm ET. Watch via livesteam at http://www.bloomberg.com/tv/. Highlights below and full transcript available upon request.

Summers on what the key is to getting a budget deal done:

"Look, nobody who holds a Treasury bill or a Treasury bond should worry about the full faith and credit of the United States... It may do so in a complex and overly expensive way because of all this posturing, but the United States is going to meet its obligations."

Summers on spending cuts and taxing the wealthy to make up for the gap:

"... I think all things need to be phased in. Crash diets aren't the best way to lose weight. And overly rapid austerity programs, as we've seen in England, have huge adverse consequences for economies."

"... I think many people don't realize - in the numbers people are using now, if you just take the baseline, the assumption is the government, the basic functions of government, the national parks, the FBI, whatever they do at HUD, all of it, is going to be smaller relative to the economy than any time in the last 50 years. And so that's already baked in."

"That's why some of us are talking more about revenues right now, not because we disagree that the right thing to do is to start on the spending side, but because huge spending cuts have already been baked in to regular government. Entitlements, yes, that's something that does have to be thought about, particularly with regard to controlling the growth of health care costs."

Lutnick on taxes:

"We are spending over $1 trillion a year that we don't have. And, you know, we all talked about Greece. What did they do? They just spent, spent, spent money that they don't have. And eventually it comes back to haunt you. So we need to be fiscally responsible... Taxes go up. I think they should go up broadly. Certainly they should go up on the wealthy, but they're going to go up broadly, because it's got to make a difference, and spending's got to be cut. I'd use a simple word, balance.

Chanos on taxes:

"I think that taxes should not go up on the middle class. I think they should go up on the wealthiest. I think that the wealthiest have the least propensity to consume. I think spending would not be hurt. And I think that talk about broadening the base and everybody paying their fair share is really somewhat crazy, because lower-income and lower-middle-income people are really paying a big burden. Taxes are regressive down there."

Chanos on compromise:

"Eventually, they're going to find the compromise, but are they going to play chicken at the end of the year? Of course - of course they are. That's the way it's worked. That's how we got here in the first place."

Chanos on whether he would short sell the U.S. if it were a company and in the current state the country is in:

"Of all the global markets, I'm probably the most constructive on the USA. So that, as a bear, meaning that I think that it's the greatest country in the world, and we still have the best long-term prospects."

Clark on whether defense cuts will hurt national security:

"So there's lots of impact of this, if we go down the military road. But will it hurt U.S. national security? Yes. Is it crippling? No. We know how to take cuts in the Pentagon. It can be done mechanically. Sure would be better if we don't do it."

Summers on whether raising taxes on the wealthy will get the U.S. through the fiscal cliff:

"That's right..."

"A great deal of the uncertainty actually has to do with whether we're going to go over the fiscal cliff. And the news that we're not going to go over the fiscal cliff will be hugely reassuring. That's the most important uncertainty that the economy faces. People live in the present. They don't live in the 2020s."

Lutnick on what advice he'd give to President Obama:

"So since I think jobs is what's going to drive this economy, I would say create an incentive package. Say to the CEOs, look, here's an idea. We're going to raise taxes on the rich, except if they go create jobs. You get a tax credit if you create jobs. You got a lot of money? You want to sit on the sidelines? Pay more taxes."

Chanos on advice to President Obama:

"If I was the president, I would say, let's put this all back on the table and let's really attack entitlements. And let's attack health care costs. That's what's doing this, because the other side said, we have to cut spending. The problem, as we know, and we talked about earlier, is that my cut in spending is your reduction in income."

"No deal is better than a bad deal over the short period. And I think that's the rational type of negotiation we have to have. We have to have a good deal. And if it means we keep talking over the contrived date of December 31, we do it. You know, we're grown-ups."

bloomberg.com

Copyright © 2012 Bloomberg - 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.

Bloomberg Archive

© 2005-2016 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

Catching a Falling Financial Knife