Probably the most important aspect of business is trust. Trust is, of course, built on competence and truth-telling. Your business partners will not trust you if you are an idiot, and they will not trust you if lie to them repeatedly. It is never a good idea to start out a business relationship with a lie. This is why television advertising is such an abject failure, for example.
At 10:30 Tuesday, Congressman Paul Ryan held a press conference to announce, with much fanfare, the Republican’s bold new plan (even newer and bolder than the old, bold new plan) to save the nation from those big-spending Democrats in the Obama Administration who like to spend money.
The plan does not achieve an actual balanced budget until after 2030, but rather it achieves something it euphemistically calls “Primary Balance” in 2015. “Primary Balance” is where we still deficit spend, but we needed a feel-good term to describe our deficit spending that would also provide a talking point for the talk shows. Only by doing this can we be guaranteed to fool the voters who are so busy trying to keep their heads above water that they’ll swallow damned near anything. According to the Ryan Plan, “Primary Balance” means all of fed dot gov’s spending minus interest payments on debt is equal to fed dot gov’s income. Since interest payments on the debt are virtually guaranteed to be one of the fastest growing components of the budget, this is a happy lie indeed.
The plan makes use of the oldest canard in politics; one of the “Major Proposals” to cut spending is to “eliminate wasteful Washington spending.” I haven’t heard that lie since yesterday.
Here’s another one: the plan is going to rout out $178 Billion in DOD waste, and then “reinvest” $100 Billion of it in…”key combat capabilities.” New weapons systems! Stimulus, anyone? Woo hoo!
In order to sell this sham to the Tea Party, it includes de-funding Obamacare. Thanks!
The plan contains happy assumptions that reveal it to be joke. How is the budget balanced? Federal spending is cut by less than $100 Billion in 2012 (sound familiar?) and then resumes rising forever. Federal revenues (tax receipts) are projected to rise by 13% in 2012, 13% in 2013, 8.2% in 2014, 4.6% in 2015…you get the idea. Detailed analysis to follow, but is this really the best we can do?
Precious metals have correctly concluded that the Ryan plan will require the Fed to keep right on printing money. Here is what the precious metals market thinks of Ryan’s plan to “balance” the budget. NOTE CAREFULLY THE TIMING OF THE MOVE:
