Biotech Values

[zipjet]

OT - US Economy

The US economy is running reasonably well (growing GDP ~2%) but is doing so by running huge budget deficits (8-10% of GDP) that artificially boost GDP.

The US is not unusual in this respect. Nearly all the countries of the industrialized world other than those with big oil revenues are running budget deficits higher than the growth rate of their GDP.

US GDP and employment (or the rest of the world) would each suffer IF it balanced the budget. IMO there is no taste for balancing the budget by either party. Yet, both parties know the current level of fiscal stimulus is unsustainable. So they must talk about it even if they have no intention of doing much. (Republicans can talk about significant spending cuts - since the Dem's won't let that happen and the Dem's can talk about large increases in taxes since the Rep's will block that.) Voting requirement of 60 votes in the Senate structurally support this standoff.

While this Kabuki goes on, the US is increasing dramatically regulation of banking and any firm that provides services to banking. That means higher costs* of government. It also means higher costs to the banking industry which ultimately burdens the US.



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* CFPB is a novelty in agency funding since it is not regularly subject to Congressional appropriations. Rather it can draw up to 12% of the Fed's operating budget plus another $200M per year through 2024.