1) Postpone austerity to spend/spend/spend and spend?
According to an article from The Wall Street Journal, the G8 leaders agreed to emphasize on policies that quickly produce jobs and growth over austerity.
Direct quotes from The Wall Street Journal—with emphasis added: “The direction the debate has taken lately should give us confidence,” Mr. Obama said in a statement to reporters at the close of the summit. “There’s now an emerging consensus that more must be done to promote growth and job creation right now in the context of these fiscal and structural reforms…”
The leaders also agreed that Greece should remain in Euro zone. There was no specific action for solving that problem except they agreed that Greece should not take this agreement as a message that Greek could have a free ride without meeting the conditions in its bailout package—a position strongly argued by German Chancellor Angela Merkel.
It seems like the G8 leaders ended their summit at Camp David agreeing on the obvious…they all need jobs and growth in their own economies—and quickly. There were lots of talk and agreement—that European debt crisis could drag the fragile American economy down even further—but no specific actions. And of course, President Obama will not admit his own fear that a collapse in Europe may mean an end to his re-election campaign this year.
Saying no to austerity is easy since it it the popular choice for the irresponsible mass. Making tough fiscal responsible decisions is not easy—and of course the incumbent candidate will not dare to do so after what happened to Sarkozy.
Questions remain how to produce jobs and growths in their countries that these leaders failed to address? And if raising taxes is in their plan, how much can they raise without the risks of further slowing job growths? If their governments plan to borrow more to stimulate the job markets, how much can they borrow and from whom? China?
Again, there was talk but no answers/solutions.
2) John Boehner insisted on no increase of the debt limit without spending cuts
Speaking of austerity, earlier this week at a fiscal summit in Washington, Speaker John Boehner announced that he would insist on Congress not to raise the debt limit without any concrete spending cuts. “When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt limit increase,” Boehner said.
“So this is not a wholesome debate. It already can be damaging, just the fact that it’s brought up,” House Minority Leader Pelosi (D-CA) said in response to Boehner’s demand of spending cuts before raising the debt limit. “I think that we should snuff it out immediately.”
This of course will set up the stage for this summer debate between Republicans and Democrats.
On one hand, we have President Obama and Democrats who want to raise taxes on the millionaires to get more revenue. Obama and Democrats have been campaigning for this using the so-called “Buffett’s Rules”—those who make over million will pay a minimum tax rate of 30%. However, this will bring in only additional $47 billion over 10 years—not counting the negative effects of tax revenues due to job losses when taxes are raised on small business owners.
And, of course, the Republicans are calling for more spending cuts. President Obama, of course, will not agree to this approach in a time when the private industries have not hired enough to lower the 8.x% unemployment rate—any spending cuts may result to job losses for government workers.
At the current rate, the debt limit will be reached sometime between November election day and the end of the year. So if Congress will not act now, actions will be needed in the lame-duck period of Congress anyway. In addition to the debt limit, the so-called Bush tax cut and the so-called Obama tax cut (aka payroll tax cut) are due to expire at the end of the year.
Let Congress act now on these 3 votes before the election. Let them be responsible to their constituents and vote on these 3 important decisions before the election. Why should Americans want the votes on these important issues by some (lame-duck) Congressman, Congresswoman, or Senator who may be on their ways out?
3) Who will be VP candidates?
Speaking of election, who will be chosen as Romney’s Vice President has been speculated since Senator Santorum dropped his bid for the Republican presidential Candidacy. Of course, this is as expected.
What is not expected is the speculation of replacing VP Biden with Secretary of State Hillary Clinton on Obama’s 2012 ticket—although I joked about this, I can’t say this is not a surprise. As Obama continues to struggle, the pressure will be on him to replace Biden.
In a recent poll by CBS News/NY Times—and these 2 media outlets are as far to the left as can be—Obama trailed Romney by 3% after tying with him a month earlier in the same poll. For an incumbent candidate, this is not good news for Obama and he may have to energize his base with a replacement of Biden.
On the other side, after speculations on Paul Ryan, Marco Rubio, Jeb Bush, Rob Portman, the latest hot VP candidate is Bobby Jindal. The current governor of Louisiana is very knowledgeable and has an impressive resume—secretary of health department for LA; former president of University of Louisiana system; former Congressman from LA’s first congressional district (read more here).
Romney should choose the best VP candidate who can match up well against Hillary Clinton—and if the candidate can do well against Hillary, he/she will do even better against Biden. And Bobby Jindal may very well be that candidate.