We have a Congress that can’t seem to get anything done. And the funny thing is if they do nothing, all of the previous laws start to expire. It reminds me of Cinderella at the ball with the prince and the approach of Midnight. In this case, we get the pumpkin.
Remember the Bush tax cut passed in 2001? In the house, 211 Republicans and 28 Democrats voted for it and 153 voted against it. In the Senate, 12 Democrats voted for the bill as did 45 Republicans. Two Republicans McCain and Chaffee voted against it with 31 Democrats. Bush signed it, no big deal. Now, today just trying to extend the tax cut has become a herculean effort. If you examine the Congress of 2001 and today’s Congress, they’re pretty comparable. Rumors have it, that Obama has said “My way or the highway.” It tends to support the idea that the square cog in the gears could be Obama as far as getting a deal in place.
Some mutton head decided that we needed to spread Democracy to the Arab world. I look for Syria’s president to get the Noble Peace prize this coming year. Egypt could have the first Islamic Democracy (that’s where you get to choose which trash can to throw your amputated limb in). Libya could have a new dictator in place with lots of military toys for sale (Got Stingers). Look for a new PBS documentary called “The Mushroom Cloud” shot on location in Iran and Israel, with a cast of millions.
In Europe, look for the Greek government to be overthrown—talk is cheap and the country is tired of the political rhetoric. The financial pain in Spain, Portugal and Ireland might spread to France. The economic problems facing the Euro is kind of like trying mix Ex-lax and Kaopectate ---you have to go when you don’t want to and can’t go when you want to. If the Euro goes kaput, look for unemployment rates to drop drastically in Europe.
In the US we could have one or two states (Illinois comes to mind) become insolvent and figure about 20 cities to file for bankruptcy.
Look for interest rates to keep artificially low. Common senses suggest that some loans are riskier than others (the reverse mortgage is no more). Of course credit card debt interest rates are a different story 20 percent rates for Visa and Master Card. But if you want to buy a home, 3% interest no down moves you in. And a lot of the government programs will give you upfront money for move in repairs (like a motorcycle and/or widescreen TV). Think I'm kidding, read this from 2008 A Dollar Down Moves You In
Consumption should plug along, no incentive to save money at these interest rates. This will be the year that we get used to living with less and spending more for it. The stock market is kind of an unknown item. Nobody can figure out what’s been holding it up for the last 4 years.
Obama care is starting to kick in. I went to a coin dealer the other day and found out that there is a provision in the bill that requires a 1099 on gold sales over $600. What part of health care is involved in gold sales? In an unrelated item that ties into the above, PayPal wants my Social Security number so they can issue me a 1099 for my eBay sales. That’s not my hand I feel reaching for my wallet.
Then if you’re familiar with the school lunch program in California, Obama’s wife has screwed that up royally. Kids aren’t crazy over whole wheat bread or skim milk, and fruit, euck, it goes in the trash, give me some fries and a burger. This smiling wife with great concerns has no idea that the kids think her school lunch menu sucks. The schools have to serve the stated menu to get reimbursed by the government. What do you do with a dozen trash cans of food that the kids won’t eat? My suggestion; the fat kids don’t get the free lunch!
More than one commentator has suggested that Obama take a course or two on Economics. I believe the suggestion comes from puzzling over his current economic policies.
The New Year will ring in with a different tone this year. It’s Republicans against the Democrats. Cash or Credit will be the issue. Congress and the President can pass all sorts of wonderful new laws. Paying for them will be the problem. The battle to raise the national debt limit could be the fight of the century. The country is divided, but it isn’t rich against poor as Obama would suggest, it's about living beyond our means.
Have a Happy New Year everyone.
Copyright 2012 by Jim Brubaker