Lower Taxes AND Spend! Deficit Cuts "Will Be Self-Defeating," Economist Declares

This is not opinion but rather the message of the markets. Any material reduction in deficit spending will generate a harsh response not only on Wall Street but also Main Street. Either devalue the currency – kick the can down the road to live another day, or immediately adopt harsh fiscal discipline and get your ass served on the silver platter of social order here and now. Nobody wants to be the lead scapegoat story on 60 minutes.

Damned if you do, or damned if you don’t. Those seeking the protection of gold understand the conundrum.

The U.S. Senate is soon expected to pass an across-the-board extension on the Bush-era tax cuts. President Barack Obama’s $858 billion proposal also allows an extension of jobless benefits for the close to 15 million unemployed Americans.

The bill, however, is still a long way from a done deal as it does not have the full backing of House Democrats, who want to limit the tax cuts to the first $250,000 of family income. Liberals also oppose the estate tax provisions in the bill, as discussed here with former Sen. Ted Kaufman (D-Del.).

Source: finance.yahoo.com