My congratulations to Congress and the President on achieving “the not-so-great things that can happen in
when both parties barely come together and agree to not really accomplish anything.” The thought is mine, but the quote is from The Onion. Washington
This morning Ezra Klein of The Washington Post says it this way, “We live in a moment where the only problems Congress seems able to solve are the problems it creates for us. The problems we actually have, meanwhile, go unsolved, and the people they afflict go on suffering.” I couldn’t have said it better myself.
As to the debt ceiling bill, The Republicans (though not all --- there are some who would have preferred to tank our economy entirely) have succeeded and the Democrats and the President have succumbed in doing nothing to help the struggling
economy with the enactment of this legislation. At best, for now this legislation doesn’t tank the economy. At worst, the debt ceiling bill moves us in the direction of a double-dip recession. US
As I said in my email of July 15th when I decided to sell most of the investment positions I oversee for various investment accounts, “I am more worried now than I was in the 2008-2009 period [of financial collapse] about the long-term financial consequences of the inability of Rs and Ds in Congress to reach some meaningful compromise on the debt ceiling/deficit reduction issues.”
I also stated in my July 15th email that I would be willing to jump back into the market if a “significant balanced compromise ($4 trillion in spending reductions and tax expenditure reductions --- given the right mix and no implementation of those reductions before 2013)” occurred on a timely basis because a “significant balanced compromise will establish a growth environment for this country and the global economy.”
Unfortunately, the debt ceiling legislation doesn’t give much hope that Congress and the President can come together to do much to help in moving the country in the direction of economic growth. Moreover, contrary to Republican belief, private enterprise will not join the discussion of a solution until there is either demand for their goods and services to warrant creating more jobs, or incentives are legislated that encourage self-interest decisions on their part to create more jobs. Further, those died-in-the-wool free-market-at-any-and-all-cost Republicans are devoid of any solution that doesn’t impose an overwhelming burden upon the least fortunate and most vulnerable in our society.
As a final note for this blog, the market reaction yesterday was a commentary on the ability of the debt ceiling legislation to “do no harm” to the
and global economies. US
Stay tuned for more on the ramifications of the debt ceiling bill (not the least of which will be the deliberations of the super committee created under the legislation to effect entitlement reform and tax reform) on investment decisions I will be making.