Budget Deficits | timiacono.com - Part 20

I”ve yet to have a look at the GOP debate this evening that, according to the news headlines, focused a lot of attention on Herman Cain’s 9-9-9 tax plan and had Mitt Romney and Rick Perry squaring off against. It likely didn’t draw much attention to Ron Paul, something which, according to the chart below from Journalism.org he’s probably used to.

Earlier, Paul unveiled his economic plan that would reduce the budget deficit by $1 trillion – no, not over ten years, over one year! Paul’s “Restore America” plan includes tax cuts and a 10 percent reduction in the government workforce that would eliminate the Departments of Education, Commerce, Energy, Interior and Housing and Urban Development.

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Will the Super Committee Sink Stocks?

[Following are excerpts from the current issue of the Weekend Update at Iacono Research.]

A simple Google news search on “super committee” turns up all sorts of headlines about a 12-member Congressional committee – split evenly between Democrats and Republicans from both the House and the Senate – that began work six weeks ago to recommend a set of proposed spending cuts and revenue increases totaling $1.2 trillion over the next ten years.

After just a brief look at the headlines, the difficulty of their job becomes clear:

10/10 Deficit ’supercommittee’ struggles as clock ticks – AP
10/11 Debt committee could raise risk of U.S. downgrade – CNN/Money
10/13 GOP: Defense cuts shouldn’t be part of super-committee plan – CBS News
10/13 House Dems recommend new taxes to ’super committee’ – LA Times
10/14 Republicans want debt panel to overhaul taxes – AP
10/14 Deficit ’super committee’ flooded with ideas. Will any work? – CSM
10/14 Panel Gets Earful Of Advice On Taming The Deficit – Kaiser Health News
10/14 Many suggestions but little time for debt panel – AP
10/14 Super Committee’s Cuts Will Impact Farm Bill – Dakota Farmer

With a set of recommendations due by November 23, just over a month from now, the progress made by this group (or the lack thereof) could be the biggest single factor in how asset markets move this fall and, based on initial indications (that are hard to come by since the committee has been operating in secrecy), things are not looking good.

(Continue reading this article at Seeking Alpha.)

“Total Disaster” in Europe Still Possible

Those whose hopes of a much bigger crisis in Europe are about to be dashed after the final approval of the EFSF bailout fund by Slovakia can take heart in this view from Reuters Breaking Views founder Hugo Dixon that the chance of a “total disaster” still exists.

Muddling through with years of zero or negative growth is now seen as the most likely scenario, an outlook that, some time ago, would have been considered a disappointment, but, after the events of the last few months, seems much less of one now.

The Super Committee’s Super Challenge

With recent moves in Europe to shore up their bailout fund, attention will soon turn to the fiscal woes here in the U.S. with all eyes trained on the progress (or lack thereof, as shown below) of the deficit reduction super committee, a group that, sometime within the next six weeks, must propose a package of $1.2 trillion in deficit savings over the next ten years that could actually get enough votes in Congress to pass.

From the Gary Varvel archive at the Indianapolis Star.

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