Agreement that something needs to be done with soaring deficits is easy to find, in the US and abroad. Actually doing something reasonable about huge deficits has proven impossible to date.
Fiscal Deficit Blame Game
Bloomberg reports Geithner Joins Boehner in Trading Blame Over Fiscal Cliff Talks.
U.S. Treasury Secretary Timothy F. Geithner and House Speaker John Boehner hardened their positions over the fiscal cliff, each blaming the other for a standoff that could lead to more than $600 billion in tax increases and spending cuts in January.
“There’s not going to be an agreement without rates going up,” Geithner said in a taped interview that aired today on CNN’s “State of the Union.” Republicans will “own the responsibility for the damage” if they “force higher rates on virtually all Americans because they’re unwilling to let tax rates go up on 2 percent of Americans.”
Republican Boehner said the White House is wasting time.
“I would say we’re nowhere, period,” Boehner said on the “Fox News Sunday” program. “We’ve put a serious offer on the table by putting revenues up there to try to get this question resolved. But the White House has responded with virtually nothing.”
There’s “clearly a chance” that there won’t be an agreement in time to avert the fiscal cliff, Boehner said on the Fox program. “Just the threat of the fiscal cliff is already hurting the economy.”
Geithner appeared on five talk shows today. In the interviews, taped Nov. 30, he challenged Republicans to make a counteroffer to the Obama administration’s framework plan.
Gene Sperling, Obama’s top economic adviser, challenged Republican congressional leaders to put an offer on the table.
“It’s for them now to come forward with their plan, with their details, so that we can start working quickly to getting an agreement,” said Sperling, director of the White House National Economic Council, on “Political Capital with Al Hunt,” airing this weekend.
“The ball really is with them now,” said Geithner, the administration’s lead negotiator on the fiscal cliff, on CNN. “They’re having a tough time trying to figure out what they can do, what they can get support from their members for.”
One good thing is happening in January. Tim Geithner is stepping down as US Treasury Secretary.
UK Deficit Cut Taking Longer Than Planned
The BBC reports Deficit cut is taking longer than planned
Chancellor George Osborne has admitted that curbing the UK’s financial deficit is “taking longer” than planned.
But he told the BBC the government was “making progress” and that to “turn back now would be a complete disaster”.
Mr Osborne, who delivers his Autumn Statement on Wednesday, said well-off people would “pay their fair share”.
“The deficit is down by a quarter. There are a million more jobs in the private sector and to turn back now, to go back to the borrowing and the debt and the spending that Ed Balls represents would be a complete disaster for our country.”
He added that some people were calling for more borrowing and others for more spending cuts, but the government had “got the right plan and we should stick to that plan”.
As you can see, political bickering over needed budget cuts is rampant on both sides of the Atlantic.
It’s important to maintain a global focus instead of looking at US problems in isolation. There is not a good fiat currency anywhere (and there cannot be by definition actually).
Mike “Mish” Shedlock