Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

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

© 2005-2019 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