Wednesday, September 21, 2011

U.S. government paralysed by political in-fighting

When I read that some Republican senators wrote to Bernanke to ask him to not to consider additional monetary stimulus proposals (here), it confirms the contention made by Democrats & some independent observers that the Republicans are out to tank the U.S. economy in order to derail Obama's re-election bid (here).

First, the Republicans forced the issue of U.S. fiscal deficit & the debts ceiling. This led to an eleventh-hour compromise which failed to impress investors. When Obama announced a job plan to bring down unemployment rate, the Republicans were not in support of the plan (here). They said that it would lead to higher fiscal deficit. When Obama announced a USD3.6 trillion deficit reduction plan, which includes the Buffet tax hike for millionaires, the Republicans again opposed the plan (here). Now, they have the cheek to tell Bernanke not to do his job in the face of a stalling economy. This kind of nasty no-holds barred politicking will lead to paralysis in the U.S. government. It is exactly the rationale given by S&P for downgrading U.S. national debts.

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