Monday, July 18, 2011

What would a President Bachmann do about the budget?

Propose a three month debt extension with shared sacrifice, cut and hikes all around.

If I were advising her, I would say, the cause is a dysfunctional Senate, this is a Senate bridge loan, so make the Senate budget things short term, or capitulate to the House.

Then isn't Bachmann wrong about PelosiCare, passed with House majority? The Bachmann position should be that more government involvement in health care is likely negative. Recognizing democracy, her first look at reducing government involvement might be Obamacare, via consolidation of programs.

The sovereign debt crisis unfolds when government flows are trying to defy an externally imposed polynomial, like oil flows. Inventory uncertainty in government planned execution become uncertain and appears to us as a short term crisis. It is not really, it is a new set of production rates imposed on the government flow.

The central bank keeps driving home resource constraint signals by causing price dispersion. So, if Congress, mainly the Senate, cannot sync up to the new energy system, and debt purchase by the Fed will simply accentuate invenory volatility. It shows up in unsustainability reports.

The solution to the resource crisis is going to be more regional, looking closer at short term constraints over smaller areas. We may have hit the proverbial cliff, the Senate has to release political power to regional organizations of states.

I guess, I am pushing revolutionary reform onto the Bachmann platform.

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