Tuesday, December 17, 2013

No government shutdown or default next year, but austerity will continue

In other news, the Senate approved by a vote of 67 to 33 the budget deal, avoiding another government shutdown and debt ceiling showdown early next year. The house had voted before. There has been some commentary in the web when the House voted on how this agreement is good, since it avoids even worse austerity, but in all fairness the changes are minor and the unnecessarily restrictive fiscal policy will continue in place. Graph below shows real government consumption and investment spending.
Expect the negative trend to continue. By the way, the Obama administration has continued the tradition started with Carter and then Reagan in which the party of Big Government is the GOP. every single democrat has reduced the deficit, and spending in office (Carter, Clinton and now Obama). Austerity for all is the Dems policy, while the GOP provides Big Government for the few and corporations.

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