The impossible was reported today when Paul Ryan announced he thinks there is a middle ground for a budget deal with Barrack Obama. They had a lunch date last week, and this week they are buddies. John Boehner also said last week he personally likes Barrack Obama.
What the heck is going on? We don’t hear a peep from the Democrats about the budget they have, but the Republicans are having a love fest.
OK, from what I read today there is more room for negotiation on MediCare, and the across the board budget cuts opened up the military budget, food programs, MedicAid, and other entitlements. The tax increases on the wealthy also help to balance those cuts with revenue. If what Paul Ryan proposes can be done incrementally, like doing small advances on cuts, piece, by piece we may cut the deficit significantly.
From this article: http://www.cnbc.com/id/100541792
“Ryan’s plan to balance the budget in 10 years is a dramatic change from last
year’s plan, which also envisioned $5 trillion in cuts, but would not have
balanced the budget until 2040.”
So what’s changed? Why so much optimism now? The answer is that we had the sequester take effect, and the stock market rose. The stock market evidently wants a balanced budget. From other reactions a budget plan would make the dollar stronger against other currencies. There is always a debate about if a stronger dollar is a good thing, but in this case, given the state of the global economy, I think we’ll come out ahead.