Mark Levin’s Liberty Amendments Can Soften Impact of Wiedemer AfterShock Economy


Mark Levin’s Liberty Amendments Can Soften Impact of Wiedemer AfterShock Economy

Mark Levin’s Liberty Amendments, specially the one about controlling federal spending, if implemented, may result in a moderate, not major as expected,  Aftershock economy.  Why?

Foreign creditors confidence in probability of US repaying debt,  now very low, will increase significantly.  Consider that the budget related Liberty amendments mandate following:

Immediately, any budget not passed by Oct 1 will result in across the board 5% cuts.  In tough times, private sector cuts back even more and comes back stronger.  The Fed Gov must also.

Immediately, any debt ceiling increase must be approved by 3/5 of both houses.  This increases probability of long needed structural budget changes limiting its growth thus debt expansion.

within 4 years, Outlays shall not exceed receipts and
fed Gov as % of GDP must not exceed 17.5%,  unless for one year only 3/5 of both houses make an exception (addressing emergencies is reasonable).

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In conclusion these measures will finally address unsustainable debt growth and the increasing Dependency on Government mindset.  The former has already caused many creditors to balk at financing our debt; left unchecked it will cause a severe Wiedemer Aftershock economy via a $ collapse when creditors increasingly dump $ denominated securities.  Why?  Because the $ by then will have virtually no chance of returning a positive return on investment (ROI).  The Dependency on Government mindset, where in many states one can earn more via Government transfer payments rather than work, retards personal responsibility for one to develop their God given skills.  Many of these skills are related to a job where one contributes positively to the economy and makes the world a better place.  The US needs to get back to where strong private entrepreneurs created many new products, industries, companies, and jobs for those interested in developing their skills.  Get to this point and GDP can again grow over 3 %.

 

For details about what an Aftershock may be please read – https://economics501.wordpress.com/2011/11/25/aftershock-economy-book-review/

 

Twitter@Economics501

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About economics501

1 - free market Capitalist; 2 - Fitness Entrepreneur; 56 years old, VP at an Investment Bank in NYC, ex Venture Capitalist, happily married with 2 girls. Education: Rutgers and NYU. I allow Ted Hruzd, my friend to blog at will here. He has many posts here. I have known Ted since we were both students at NYU. Ted also works for an Investment Bank as a VP in Equity Global Markets. ------------------------- I was very very Socialist leaning as a 22 year old. I then strongly believed in Gov role in helping the poor. However, as a USDA Child Nutrition Programs, I personally accounted for millions of fraud, abuse, and waste of tax payer money. I came to believe that the poor would be best served with less Gov programs and more with direct aid via tax system. Then after 5 years I became a free market capitalist, was a venture capitalist in 2007 and helped start 2 high tech companies. I dedicate this site to champion free market capitalism as the best road to Prosperity. Please join in. If you disagree, fine, but please post with dignity and class and be civil. Argue with facts always.
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