Listening to the discussion on the USA debt ceiling, most political pundits would like to have you believe that cutting spending is all that is necessary is to balance the budget. But that is really too simple. The issue is NOT the spending per se – but growing imbalance in the USA spending. By simply trying to cut spending, the imbalances will remain and grow. The major item out of balance is entitlements.
The weekly initial unemployment claims data release this week continued to show elevated levels. Historically, claims exceeding 400,000 per week yields employment gains less than the workforce growth.