Posted 12/4/2012 20:16 (#2733161 - in reply to #2732981) Subject: Re: Gold chart watchers
The fiscal cliff discussions are a charade. They are only gonna reduce the yearly deficit from 1.2 trillion to 1.1 trillion or 100 billion dollars per year for 10 years.
You have to remember this about the deficit. It has been running 1.2 trillion per year. The national GDP is around 15 trillion. The deficit alone is 8% of GDP so each 100 biilion in deficit reduction reduces gdp by around 1/2 of 1%. It also reduces tax revenue to the govt which has the effect of increasing the deficit. If congress was to balance the budget tomorrow they would contract gdp arounf 1 trillion or 7% which would cause a huge depression. They are stuck so they choose the easy route that gets them re-elected. We just re-elected exactly what we had and what we had has failed for 10 years in a row to do anything to help the problem.