Thursday, January 24, 2013

Financial Triggers anyone?

One thing I have learned over time is that the reason most business legal disputes happen is because most contracts are not well formed as to what happens if someone fails to live up to their end of the agreement. I see the same thing when I look at government deal making. I agree, a lot of it is a true difference in philosophy but there is a way to get to a middle ground and for some reason it (until this last deal) seldom to never has been brought up.

What I am talking about is financial triggers.

For once, Republicans set a trigger and it worked. No budget? No more increases in the spending limit and automatic cuts. A simple trigger. The ball is in democrat leaderships court. The people see it as reasonable compromise. When a budget does come forward they should put in more triggers.

First, You set the goals, be it unemployment levels, debt levels, spending when compared to GDP, tax levels, the GDP. What ever.

Then you set the triggers. Say unemployment doesn't go down then you set a trigger of say lowering interest rate levels, cutting taxes on employers etc.

Say spending when compared to GDP does not go down, then you set a trigger of automatic spending cuts. If GDP goes up then no cuts or lesser cuts get made.

If the debt does not decrease then you set triggers for that as well. If Obama pushes for more taxes on employers it will probably impact one of those factors and set off a trigger.

The goal would change from "Punish those who we do not like" to "What is going to help the economy so we dont get hit by a trigger". If the proper triggers are put in place then it would be even difficult for Obama to screw our economy up. If it works, he gets the credit but the republicans could claim credit also. If the economy flopped it would all be because of his financial and spending policy. Policies that could be reversed with the proper triggers.

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