Punting is wrong answer for 'fiscal cliff'
Reports out of Washington suggest President Obama is pushing a short-term postponement of the issue. Not only will that not solve the problem, it increases the pressure on the debt ceiling fight to come.
As the country barrels towards 2013 with no "fiscal cliff" deal in sight, headlines are crossing Friday that the politicos are about to revert to what they always do when faced with tough choices on taxes and spending cuts and the dreadful long-term debt trajectory: They punt. Keep the charade of government largess and low taxes going just a little bit longer.
Not only will this not solve the problem (as I've said before, the issue is out-of-control healthcare costs) it makes the situation worse by increasing the pressure on Washington when the debt ceiling fight starts in January. The Treasury has said it will hit its borrowing limit on Dec. 31 -- but the hard deadline, thanks to emergency cash management, will be in February or March.
Here's why this deal should be viewed with skepticism.
Details. The latest suggests Obama is proposing a 60-90 day deal that would extend the Bush tax cuts for those making less than $400,000 a year, delay or replace automatic spending cuts (from the congressional deficit "super committee" failure), keep extended unemployment benefits, and fix issues related to the Alternative Minimum Tax and the Medicare "doc fix."
This is exactly the kind of hollow, kick-the-can option the credit rating agencies have been warning Washington to resist. Moody's recently said that a last minute kick-the-can deal would be the worst possible outcome since it would fail to stabilize the country's debt to GDP ratio. Fitch warned that it would consider a downgrade if the political gridlock continued and the fiscal cliff debate dragged well into 2013.
Remember that Standard & Poor's cut our AAA rating last summer, in large part, because of our dysfunctional politics.
Markets are already expressing their displeasure with this option, as the Dow Jones Industrial Average slices down through its 50-day and 200-day moving averages for the first time since the November wipeout. Volatility is surging. And investors are scrambling into safe haven assets like the U.S. Dollar and Treasury bonds.
Disclosure: Anthony has recommended QID and TMF to his clients.
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This is a good article by Anthony.
The cliff will hurt, the can kicking will hurt, but the Fitch downgrade will REALLY hurt.
I do not understand why our elected officials cannot see the ramifications of another downgrade.
We consistently elect and re-elect people with no leadership experience and then expect them to lead us through difficult times. These people have never had to make a hard decision in their life, relatively speaking. And yet we somehow think they'll be willing to do it now, when we need them to? Way to go, my fellow Americans. Once again, you rolled your fat-a$$es into the voting booth and made terrible choices. And now, we're all going to have to suffer the consequences for your ignorant partisanship. To all of you who pulled the lever to re-elect any of our current crop of idiots, the blame falls squarely on you.
Enough is enough!
The Middle Class is getting squeezed and we pay the majority of the taxes. I remember the only way our politicians listen to us is when we march in the thousands on their door steps. That is what we will do on August 28, 2013 - the Middle Class Rights march on Washington, D.C. THEN THEY WILL KNOW NOT TO MESS WITH THE MIDDLE CLASS AGAIN!!!!
Hey reeffer...what story are you talking about that "Americans" are not buying? Not buying that you can't spend your way out of debt? Not buying that you can't tax a country into prosperity? Not buying that if you confiscate ALL WEALTH.....not just the wealthy's money....EVERYBODY'S money, every last dime and asset of every living sole in this country it WILL NOT be enough to pay off the debt and will only fund the government less than a year?
If that's what you're talking about, you are right, we ain't buying it! By the way, conservatives and republicans are MORE AMERICAN than any fool who thinks this idiot in chief has the best interest of the country at heart.
The colective sleaze that constitutes government, local, federal, and state, but especially federal, would make Caligulas reign blush. The deception and lying that is the norm while trying to get reelected is a disgrace. I have become convinced that only a catastrophic fiscal/economic meltdown will bring us to our senses. Patching up our crisis with fed and treasury manipulation will do nothing to start a real long time recovery and politicians attempts to disguise the looting of Americas wealth, whats left of it, with tricky accounting and slogans like spending reductions, which are only proposed slowing of spending, are simple lies. But with a simple uninformed populace, they get away with it.
If you sit with a note pad and add the defecits anounced each day, from the post office to Fannie/Freddie, Amtrak, cities, states, union pensions etc, $16 trillion is pocket change.
Anyone that believes our current admin and their cohorts have any interest in restoring solvency to our nation is in denial. Start paying attention to their actions, not their rhetoric.
Unfortunately the takers will not pay attention until they get the letter stating THEIR IS NO MORE MONEY, WE ARE BROKE, AND CONSEQUENTLY, SO ARE YOU!
Welcome to Obamaville. Four more years of a terribly expensive, very bad dream.
I expect a little more then a punt...Maybe an extra point that hits an upright and teeters on the crossbar.
With a flag....
Next week should show us an end run going for the two...
If that doesn't happen, we are stuck on the one; Going the opposite direction.
Of course most people down here have an eye on Washington and the other one on what's going on here on the floor...Scumbags ready to hear what they want to hear so they can start selling off...Hopefully these crooks will be disappointed....Oh well, things not looking too good but, its just a waiting game for now...Be careful...More later.
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