16.1.12

Macro view

Rogoff demonstrated that countries with debt/GDP > 90% are heading to recessions (plural). USA is now around 100%, and some analysts think they will suffer the same pain we are now living in Europe, but on a bigger scale. There are no easy solutions. Trying to control the deficits makes sense even if it slows down the economy, as we have to stop the loop at certain point. The problem is that our states are no attacking the real enemies but just the middle class with tax increases. It is really nice to see how some republican candidates try to be imaginative and propose different ways of solving the crisis.

We are not saying that the Republican party is better. In fact, when the republicans were in the government the deficits went crazy. Also a well-managed healthcare could be much cheaper than other private options. However, at the end, Romney and Obama will behave quite similarly. Perry is a joke (you can tell he is not very bright), Gingrich is very God-focused, which by the way it´s weird for Libertarian party such as the Republican one..., but Caine (out of the race after too many flirts) and Ron Paul came up with new ideas.

Herman Cain had the 9-9-9 plan (link here): 9% income tax, 9% corporate tax, 9% VAT, that goes with a huge cut in Government spending. Ron Paul wants to sharply cut the spending by one trillion USD and return to the gold model, so as every buck is backed up by gold. He thinks with too much printing Americans are getting poor (his program here). It´s interesting...