Democrats called 1.5% cuts “draconian” and that is after tripling deficit spending in 2008 over 2007 levels. The yearly deficit in 2010 level was over and 6.5 times the 2007 level.
The United States is on a fiscal path towards insolvency and policymakers are at a “tipping point,” a Federal Reserve official said on Tuesday.
“If we continue down on the path on which the fiscal authorities put us, we will become insolvent, the question is when,” Dallas Federal Reserve Bank President Richard Fisher said in a question and answer session after delivering a speech at the University of Frankfurt. “The short-term negotiations are very important, I look at this as a tipping point.”