One by one, congressional Republicans are revoking their no-tax-increase pledges, opening the door to a fiscal-cliff compromise. Sadly, Democrats are just as quickly closing the door by calling for tax increases now and entitlement cuts later, if at all.
Democrats have good reasons (or so they think), beginning with their interpretation of U.S. President Barack Obama's Nov. 6 victory as a mandate to raise tax rates on the wealthy while protecting the social contract. Also, liberal groups are making political trouble for Democrats by inciting seniors to oppose any and all cuts to Medicare and Social Security.
But if Democrats refuse to control entitlements, there will be no fiscal-cliff deal. Obama can put a quick end to this bickering. Instead of staging campaign-style events around the country to build public support for the hands-off-entitlements strategy, the president should tell voters the truth: The only way to avoid the more than $600 billion in spending cuts and tax increases scheduled for January is for both sides to make political sacrifices in equal measure -- tax increases from Republicans and entitlement cuts from Democrats.
David Fuller's view If this standoff is allowed to go down to the fiscal cliff wire, it will further undermine confidence in US political leadership. That would be unfortunate.
If you managed to read the article by John Mauldin (Email (1) yesterday) you saw some very important charts showing the transference of gold from West to East. This trend has certainly increased in recent years.
Asian economies, as veteran subscribers may recall, mostly peaked with a bubble in early 1994, experienced a severe retrenchment over the next few years, and did not really begin to recover until 2003. They also fell sharply in 2008 but have seen a strong recovery subsequently. Thailand is a good example.
It was a difficult period of retrenchment, as I recall, with little or no quantitative easing (QE) to cushion the impact of a slump in growth. Today, these economies are quite healthy, despite slow global GDP growth.
Our QE in the West has cushioned the slump but will this also lead to a slower and more elusive recovery? I suspect so and we will find out over the next dozen years or more.
Returning to the Asian gold, while the West's Autonomies are mostly significant beneficiaries of Asia's stronger GDP growth, many other smaller, domestic firms are struggling. Asian markets can be volatile but they generally have stronger GDP growth and firmer currencies than most Western countries.