Dollar Rebounds on Dubai Debt Worries
http://online.wsj.com/article/SB10001424052748703499404574559273731673930.html?mod=djemTMB#articleTabs%3Darticle
Might the current Washington administration be of a similar mind to their Democratic brethren in California?
If so (and why not since California is the home of Pelosi), then what did California do to keep the benefits rolling until this year? Well, for one they kept spending on every item on their social agenda. They also didn't cut back on anything and gladly raised public "union" salaries and benefits to twice the level of those in the private sector (according to a number of articles in the mainstream press; to wit, the retirement income of the Orinda, CA fire chief was reported in June to be $300,000 per year, at a retirement age of 51).
Thus, if California would be an economic model for the current administration, and it appears from their emphasis on "healthcare funding expansion" rather than "healthcare reform", this is the direction they are going.
And, since the administration and Congress appear to pay only the most cursory lip service to deficit reduction (see how they increased the budget in March for their cherished programs).
And, since they believe higher taxes is always a good idea to fund their social welfare (not unlike California), what might we have to look forward to?
1. Let's see? California has lost a bunch of its tax base as the well-to-do and business decided they didn't like paying taxes - i.e. reduced income and jobs.
2. While California has had some difficulty borrowing, Washington has the Federal Reserve's quantitative easing.
It would be nice to see policies in Washington that don't shout out "California here we come!" but, of course, who'll be bailing out Uncle Sam?
Etc., etc., etc. with respect to jobs and inflation and interest rates and American's standard of living!
In light of the above, does it make sense to hold paper dollars or something that can stand up to the shower of cash from quantitative easing?
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