The question is whether these Republicans will stick to the guns when voters feel the pinch. My feeling is that they are more likely to seek political cover.

John Browne at Capitalism Magazine

EXCERPTS:

Most new Republican representatives are well-meaning and genuinely wish to honor their election pledges of reducing the massive government spending and regulations that are strangling the US economy. If they hold enthusiastically to their good intentions, austerity likely will hit America as the natural counteraction to the massive and irresponsible asset booms of the late ’90s to mid-aughts. The question is whether these Republicans will stick to the guns when voters feel the pinch. My feeling is that they are more likely to seek political cover.

Given that many European countries opted for austerity in 2010, it is instructive to gauge the current political situation across the Atlantic as a preview of what may confront Washington.

Throughout Europe, strikes and riots have paralyzed major cities. Several major EU member-states, such as Belgium, Italy and France, appear increasingly likely to follow Greece and Ireland into requiring bailouts. Already the Swiss central bank has announced that it will not accept the bonds of Ireland or Greece, now rated as ‘junk,’ as collateral, even for repurchase financing.

The acid test will be] whether Republicans muster the courage required to freeze the Treasury debt limit. Should they fail to hold the line, a green light will be given to the inflationists, and a cut in America’s vital AAA credit rating may be forthcoming.

Should the dollar and the euro move nearer to collapse in tandem, an international financial and economic meltdown will threaten.

FULL ARTICLE

Help Make A Difference By Sharing These Articles On Facebook, Twitter And Elsewhere:

• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 
• 

Interested In Further Reading? Click Here