Salient to Investors:
History shows that presidents’ most ambitious ventures often create as many problems as they solve. Barbara Perry at the University of Virginia said presidents act first and think later about the long-term consequences.
Obama’s long-run budget forecasts call for exploding deficits beyond the customary 10-year planning period – by 2040, debt held by the public is expected to exceed 103 percent of GDP.
H.W. Brands says presidents as different as Truman and Reagan contributed to our current fiscal woes – Truman by putting the US on a permanent war footing, and Reagan by making chronic budget deficits palatable to conservatives.
Lyndon Johnson figured that controlling healthcare costs could wait and George W. Bush erroneously believed he could cut taxes and reduce the national debt at the same time.
At the end of Q3 2012, more than 2 years after Dodd-Frank, the 5 largest banks held more than 55 percent of the economy, versus 43 percent before the crisis.
John Williams at the FRB San Francisco warned in 2011 that said Dodd-Frank restricts the Fed’s ability to provide liquidity to non-bank financial institutions.
Alan Viard at the American Enterprise Institute said there’s never been a sweeping piece of legislation that did not have unintended consequences, so there’s no reason for this to be any different.
Read the full article at http://www.bloomberg.com/news/2013-01-10/obama-congress-u-s-budget-battle-benefits-from-no-grand-bargain.html.