Thursday, October 25, 2012

The Fiscal Cliff

           Ahh the fiscal cliff, the result of last summer's debt-ceiling debacle.  Rather than try to work together and solve our nation’s debt problem, our fearless leaders in Congress kicked the can down the road once again.  Democrats and Republicans in Congress decided our debt crisis could not be solved until after the election.  Unfortunately for the American people, the Tea Party needed to be sure we “solved” this issue before they allowed the US Government to raise the debt ceiling and pay off the bills we already incurred (which has no affect on future spending). 
            The solution Congress came up with was automatic tax hikes and spending cuts that take effect on January 1st, 2013.  To make matters worse, these sequestrations happen across the board without rhyme or reason.  The general consensus among economists is that if the fiscal cliff is not lifted the US will head into another recession.  If you paid attention to the presidential campaigns, watched the debates, or followed the numerous Congressional elections you might not have any idea about the fiscal cliff or how to solve it.  As I stated before, we had 3 presidential debates and not once was there a serious discussion about the fiscal cliff. 
            We are concerned about the anemic growth in the post-financial crisis economy.  Many Republicans point to the slow growth in 2012 as why Obama should not be re-elected.  It is important to understand the detrimental effects the fiscal cliff has on our economy.  This summer, for the first time ever, Standard & Poor’s downgraded the credit rating of the United States.  Other agencies plan on doing the same if we do not solve the fiscal cliff or our debt issues.  With the national debt at $16 trillion, another downgrade could lead to higher interest rates, which would equate to billions of dollars a year in payments.  Unfortunately for us, there is another, more complicated, effect of the fiscal cliff.
            The stock market is up, the housing marketing is rebounding, and consumer confidence is rising.  So where are the jobs?  Uncertainty is a huge obstacle to corporations large and small.  Uncertainty prevents many CEOs from making decisions about the future.  The failure to deal with the fiscal cliff has sown the seeds of uncertainty in CEOs throughout our nation and the world.  I’ve read reports from SPDR funds, Envestnet, and numerous big banks and investment firms urging Congress to do something, anything that will provide them with some direction.  The financial sector just needs some direction from the government so they know where to invest their money. 
            And it is not just the financial industry.  American corporations hold about $1.7 trillion on the books and my guess is that they are dying to spend some of that cash.  Defense contractors, such as, Lockheed Martin, Northtrop Grunman, and General Dynamic are sitting with cash on their books to brace themselves for cuts in defense spending.  The CFO of Siemens, the German industrial giant, has admitted that they are delaying new investments and expenditures until the fiscal cliff is resolved.  The CEO of Legrand, a global manufacturer, has stated that they are holding off on hiring until we are in a more stable environment. 
            It is time for Congress to stop holding back our recovery.  Consumer confidence and spending is bouncing back, and Congress needs to provide businesses with a clear direction so they can begin to benefit from this.  Some may argue that Obama’s policies have slowed down our recovery, but I believe the real culprit is the uncertainty created by our horrible Congress.  Whoever wins the election will need to tackle the fiscal cliff in order for America to truly recover and transition into economy of the future.  So as I finish this post I will leave you with this.  The CEO of JP Morgan, Jamie Dimon, said last week that many on Wall Street would be fine with a rise in taxes as long as it was part of a concrete plan to deal with the fiscal cliff and our debt issues.  

Tuesday, October 23, 2012

The Final Debate

            Debate season is finally over!  Feel relived?  I wasn’t sure if the candidates could handle anymore!  The debates covered topics ranging from Obamacare, to China, to gun policy, but did anyone else notice the lack of tough questions?  The Romney and Obama teams made sure no moderator was going to throw either candidate a curve ball.  From Obama’s first debate to Romney last night, we can see that these candidates rehearse and plan their answers.  Don’t seem too combative!  Don’t say anything stupid!  No gaffes here!

            Unfortunately for the America people, when candidates are not asked tough questions we don’t hear the answers we need.  I couldn’t help but notice the lack of discussions on two of the most important issues we face today as a country: the fiscal cliff and the lack of bipartisan leadership.  Oh I’m sure they where both mentioned in passing.  The last two minutes of the first debate was even dedicated to the topic.  However, if it were up to me I would have a debate solely on these two issues because they explain what is wrong with our government today.  Our current government is compromised of two parties who refuse to work together and solve our nations problems.  As seen with the fiscal cliff, Democrats and Republicans have been kicking the can down the road for decades.  Whether the issue is healthcare, financial reform, immigration, or social security, both parties only seem to point fingers and pass blame.  This complete and utter lack of governance has forced the United States to the brink of decline and we need to resolve this.  Without both parties working together for the benefit of America and not democrats or republicans, we will not solve any of our problems.
            The most important question facing our next president is “What will you do to work with the other side and lead our great nation?”  I voted for Obama in 2008 because I thought he would be able to lead us.  Hope and Change resonated with me. President Obama admitted you cannot change Washington from within.  However, Obama could have been a better leader.  The reason I am not as fired up as I was in 2008 is because Obama has changed.  He stopped reaching out to us, talking to us, telling us what he was doing.  I am not on the Romney bandwagon either because I think Romney will work for his donors rather than the American people.
            One of my favorites President’s ever was FDR.  In high school, I learned about FDR’s fireside chats.  I found his leadership amazing.  Every week FDR got on the radio and talked to the American people.  It was FDR and not the media who shaped the narrative of our great nation.  Today too much talk comes from Fox News and MSNBC and not enough from our President and leaders. 
            With that said, welcome to purple-state politics.  A blog based on independent, centrist views.  American needs to break away from this red / blue divide and realize we need to work together to succeed.  With help we can begin to create more purple states with government that leads rather than bickers.  These states will be based on what is best for the nation and not for each individual party.  I believe I am in the majority as a fiscal conservative and social liberal.  It is time for us to stand up and make our voice heard!