The US has commenced austerity

[Mattus]

If you listen carefully, just beyond the racket of our own bawdy election-year ruckus, you can hear the faint tinkle of something breaking. Something fragile. You could almost be forgiven for missing it amongst the noisy shouting and partisan arguments about nothing. But you should really pay attention to it, for that noise is the sound of the US government triggering austerity. Put your super into cash, because the world economy is about to take another flogging.

After teetering for several years on the brink of the "US financial cliff" resulting from the budget control act of 2011, the US has finally gone over. It has begun a program of automatic, mandatory and indiscriminate budget cuts of more than $1.2 trillion over 10 years, with $85 billion cut before the next opportunity to stop it in September. Unfortunately these numbers are so large as to be effectively meaningless to most people. But let's just say its a lot. It will be felt. Three NBNs worth every year, that's what they are cutting.

The defence budget is slashed by 23%. The F35 jets the western world has been mortgaging itself for will not be completed.

Medicare is cut by 2%, and people will die as a result. Science research and development, which is already unable to fund 90% of its science programs, will have its budget cut by another 11%.

The domestic response to this in the USA can only be violence. The protests we saw in Athens will be timid compared to what the big bad has in store. By the time the lefties and the righties are done pointing fingers at eachother the damage will have been done. Globally, markets will tumble.

It's a bit too easy to overlook this turning point, and the media - who are usually hysterical about this sortof thing, have not really done a good job of underscoring just how drastic and wide ranging these cuts are. We all went over the cliff with America this weekend, and are in free fall. By the time we feel the impact it will be too late.

[AiA in Atlanta]

The GOP warned against European-style socialist measures were Obama to be re-elected. Well, that is what we got: European-style socialist austerity. Not sure that violence will result however. Personally I feel Obama has been fear-mongering just a bit.

[AnimalMother]

The USA's debt-fuelled government bubble could not last forever.

The sooner it pops, the less damage there will be.

[Neferti]

The USA's debt-fuelled government bubble could not last forever.

The sooner it pops, the less damage there will be

To whom?

[AnimalMother]

Everyone.

[AiA in Atlanta]

To whom?

The World Economy.


Still, austerity measures haven't worked to well in Europe, have they?

[AiA in Atlanta]

The Dow Jones reached an all time high today. The GOP predicted it would tank if Obama was re-elected.

[Super Nova]

To whom?

The World Economy.


Still, austerity measures haven't worked to well in Europe, have they?

Well you have to start somewhere. You cannot keep borrowing and borrowing with no plan to pay it back. It's workign here it is just too many people winging. That should have saved more during the good times. In the UK a Labor government pissed all the money up with wall with big spending. Now the concervative government is taking all the hard decisions to try and fix. I fear they will be thrown out next election because all the good news is swamped by the complaining.

Lead the way USA. Get your house in order and show others how to do it.

[AiA in Atlanta]

Not sure if this form of "austerity" is the way to go, especially considering that the US economy has just begun to rebound.

[The Uncanny Hengeman]

My first time on the POLITICS tab since I re joined.

That was a magnificent post Mattus.

Not sayin' you're right. I don't know. But full marks for passion. The Left have a big horn for Hispanics and illegal immigration, Christ knows why. Will be interesting to see if the chickens come home to roost when all of dat free money gets turned off, and if the morons over here begin to pay attention.