What scares the P out of all Congressmen and pols is the reduction in GDP that will happen if they reduce the "G" part of the GDP formula enough to balance the budget. If they do that it will be an immediate 12% hit to the raw GDP number.
The job losses and gnashing of teeth that would result from that, plus the increased demand on the entitlement side makes cutting anything akin to handling Cobras to a politician.
It won't happen, so the market will end up doing it by shutting .gov out of capital markets. That's when the Fed steps in, but again, that's the other side of the "rock-hard place" dilemma. Accelerating debasement with the concurrent ramp in essential commodities, without associated increases in wages due to our "free trade" agreements that arbitrage said wages against the Mexicans and Chinese.
We're F'd.
Well, this is true. The fact is this whole hyper consumerism lifestyle we all so covet is built upon government spending and debt. There is plenty of money in the world to live well, but it would be a "live well" like your grandparents did in the 50s. A kind of "Ozzie and Harriett" or "Father Knows Best" of a nice simple home with one, maybe two cars, and enough consumer products to make life comortable. Not the four cars for a family of five, 3,500 square foot mini mansion, 200 guns in the gunsafe, and eating out every night kind of "living well" that we have come to know in the last 30 years with the tremendous expansion of government spending and debt creation.
