dailyreckoning.com / By Addison Wiggin / December 4, 2012
“Equating tax hikes and spending cuts in the U.S. with a ‘fiscal cliff’ is like calling a spot of exercise and a balanced diet ‘Caloric Armageddon’ for the morbidly obese.”
So quipped The Daily Reckoning’s Joel Bowman yesterday during a flurry of intercontinental emails.
Surely, it’s more entertaining than this: “Stocks and commodities,” reports the Financial Times this morning, “are struggling for traction as investors express renewed concern about the prospects for the U.S. economy amid continual bickering in Washington over the fiscal cliff.”
“The only real problem with the fiscal cliff,” added our investment director Eric Fry, “is that it isn’t two or three times higher. The very term rests on the specious premise that government spending — fed by confiscation from the private sector — is essential to producing growth.”
The big “news” yesterday was that the House Republicans came forward with a budget proposal to counter the one the White House offered on Friday.
Looking at the proposals side by side, we’re underwhelmed… by how little difference would either proposal make. Fair warning: The following analysis is likely to cause your eyes to glaze over.
While you ingest, keep in mind, in the logic of Washington…
- Numbers come in a 10-year increments. Never mind that future presidents and congresses are not bound by the actions of current ones
- ”Spending cuts” are merely reductions in planned spending increases.
First, the White House…