So the Super-Committee, as predicted, has failed. Another example of the lunacy that passes for governance in Washington these days. Let us see how long it takes for Congress to try to water down the automatic “cuts” required by the sequester. Should be coming any time now. Of course the failure leaves Congress with the messy issues of the payroll tax cut extension, as well as an extension of unemployment benefits. Solutions there, as of today, do not sound promising.
As I perused the Washington Post, contemplating the super-committee failure, I bumped into this column by Steve Pearlstein. Pearlstein is a writer who gets it, and this column struck me as he has gotten to the real rub of many of our problems. The country burned through tremendous wealth in the great recession, and we are still trying to figure out how to apportion the losses.
In fact, even four years into the downturn, Americans continue to live well beyond their means, consuming more than they produce and investing more than they save. The best approximation of this gap is the country’s trade deficit, broadly defined, which last year was $470 billion, or slightly more than 3 percent of gross domestic product. That’s down from the peak of 7 percent of GDP in 2006, but still too high for the world’s richest country, reflecting a near-record federal budget deficit, an overvalued currency and a household savings rate that is below what it needs to be over the long term.
It is a column worth a read, but it will not likely snap you out of the doldrums I know you are in because of the news of failure of the super-committee!!!!!!Happy Monday.