We are fast approaching the technical deadline of August 2nd before the US defaults on its debt and can no longer pay all its obligations. The GOP and Democrats are at odds with each other as to how to handle the debt crisis. The GOP is looking to approach the task by cutting more spending, while president Obama would prefer to raise taxes to increase the revenue.
Either way something needs to be done to keep the US from a credit default and possible S&P downgrade of its credit worthiness. The current administration has gone on a spending spree that has eclipsed all other administrations combined. We are buried under a mountain of debt that we may never climb out of, and the president wants to fix the problem by getting more money out of a beleaguered public with more than 9.2% unemployment. Along with that, he wants to tax corporations more. The corporations are not hiring right now due to the business unfriendly attitude of this administration and uncertainty of what the new policies will be…so the answer is tax more???
Currently this administration is spending $4 billion more than they take in on a DAILY BASIS. As a tax payer and citizen of this country I am appalled by how bad things are and continue to be headed. I have heard president Obama continue to blame past administrations with regards to the economic issues we currently face. While I am in agreement that there were serious economic problems and a spiraling economy prior to Obama taking office…there has been $2 trillion thrown at the problem and we are no better for it. It would have been better to split up that $2 T of cash for every man, woman and child in this country and allow them to spend it. That would have stimulated the economy.
It appears there is no end to political posturing on either side. From speaker Boehner’s walk out of the negotiations, to president Obama’s unwillingness to cut spending to a reasonable level. I am frustrated as an American that this is still going on.
Whatever does happen needs to happen quickly otherwise we will have people on social security not receiving checks, military and government employees laid off and who knows what effects it will have on the markets.
One thing I am completely opposed to is another quantitative easing program to spend more money to fix the economy. The markets and economy have the ability to regulate themselves without government interference and uncertainties. In the words of Rodney King…”can’t we all just get along?”
In economic news for the week Monday holds no major economic reports.
Tuesday we have new home sales, consumer confidence and the Case-Shiller home prices due out. As I have said in the past, new home sales have been better than the existing home sales. If you’re going to buy cheap…buy new.
Wednesday we have durable goods orders and the beige book numbers
Thursday brings us jobless claims and pending home sales. Last weeks jobless claims were still over the 400K threshold, yet the market rallied in a large way. I know some of it was due to debt talks improving and the quieting in the Eurozone with a new bailout/restructuring/gifts for Greece.
Friday we have the GDP numbers, Chicago PMI, consumer sentiment, and housing vacancy number.
T-9 days and counting to US default ceiling.