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06/27/2011

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Ricardo's Ghost

Cut, cap and balance is a charade. It's what GOP politicians seem to saying to avoid talking about what actual spending cuts and tax rises they think are needed to get rid of the deficit.

Apparently David Cameron has come in for some admiration in Washington for actually trying to get to grips with the UK's deficit. It's worth noting that this meant some hefty tax rises: most notably VAT (our sales tax) and the top rate of income tax. This combined with an average cut of 25% on discretionary spending means Cameron is aiming to eliminate the structural deficit by 2015. Those are the sorts of hard decisions Congress is going to have to face up to if it wants to be taken seriously on deficit reduction. I'm not going to be holding my breath...

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