Warren Buffett: I could end the deficit in 5 minutes.

[jiimbergin]

“I could end the deficit in 5 minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP all sitting members of congress are ineligible for reelection.”

http://www.ritholtz.com/blog/2011/07...-in-5-minutes/


We needed this law 40 years ago

[brent217]

Re: Warren Buffett: I could end the deficit in 5 minutes.

Even if this law was put in, there would be an exception: "This law does not apply during periods of war." As the USA has been "at war" with Afghanistan and Iraq for almost 10 years, the rule would not have been applicable.

[lektrode]

Re: Warren Buffett: I could end the deficit in 5 minutes.

“I could end the deficit in 5 minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP all sitting members of congress are ineligible for reelection.”

http://www.ritholtz.com/blog/2011/07...-in-5-minutes/


We needed this law 40 years ago

i'd go one better than that: NO BALANCED BUDGET = NO PAY
since the debt limit has been raised, what, over 100 times now, since 1917? (read: 3 short years after the dems passed the fed reserve act)

[Chomsky]

Re: Warren Buffett: I could end the deficit in 5 minutes.

i'd go one better than that: NO BALANCED BUDGET = NO PAY
since the debt limit has been raised, what, over 100 times now, since 1917? (read: 3 short years after the dems passed the fed reserve act)

Not possible under a dollar standard, right? The US has to run deficits to provide global dollar liquidity.

http://en.wikipedia.org/wiki/Triffin%27s_dilemma

[Starving Steve]

Re: Warren Buffett: I could end the deficit in 5 minutes.

The easy money policies of the Federal Reserve Bank, especially under Alan Greenspan and now Ben Bernanke, are the reason why the U.S. is drowning in deficits. The Federal Reserve had insisted that the federal govn't run deficits and to be sure to spend any surplus should one occur.

Incredible as this policy is, it came directly from the economics teaching --- the Keynsian gospel --- taught in the universities.... So now, the Great Recession is their baby. They caused it, and they have not a clue how to dig-out of it.

And the beauty of this Great Recession is that anything the Fed does can (and will) be countered by the People's Bank of China. They have trillions of dollars to play with to block Fed policy.

It was John Maynard Keynes who commented that deficits don't matter because in the long-run, we are all dead. This cute retort silenced his critics. But this is the long-run now, with deficits piling-up on top of deficits from decades long past, so the last inning of this ball game is not going to be pretty. There is no way to pay-down this deficit except to raise taxes and cut spending, both at the same time. That means a very painful hard-landing as the Great Recession hits bottom.

[gwynedd1]

Re: Warren Buffett: I could end the deficit in 5 minutes.

I quite distinctly recall his analysis. USD carry trade will inevitably result in there being far more USDs that the stuff is actually worth. Its inevitable.

[LazyBoy]

Re: Warren Buffett: I could end the deficit in 5 minutes.

Even if this law was put in, there would be an exception: "This law does not apply during periods of war." As the USA has been "at war" with Afghanistan and Iraq for almost 10 years, the rule would not have been applicable.

Hard to justify when congress has nothing to do with the US going to war anymore.
OTOH, they don't have to justify anything either.