Happy New Year and Good Riddance to a Bad Congress!
The actions of Congress over the past two years, and especially the past two weeks should be an embarassment to all Americans, no matter what political party.
The last-minute "deal" was no deal at all -- when it comes to preserving America's future. And the process destroyed respect for our country around the world. We now look much like the governments of Greece and Italy and Spain -- taking laughable baby steps toward the resolution of a huge and overwhelming debt problem.
Here's a link to my comments on CNN yesterday.
Kirk Comment: I embedded her CNN interview about the so called "deficit deal" that is a sad joke for anyone who understands the real issues.
I called it an "Alice in Wonderland" moment -- the "Mad Hatter's Tea Party." This is what we have come to -- and historians will look back on this moment with dismay.
The overwhelming issue is that the deal does absolutely NOTHING to change our annual budget deficits, which keep creating a larger national debt. And the term "budget deficit" is more than an oxymoron -- because while we have had trillion dollar deficits for each of the past three years, we have not even had a Federal budget!
The Congressional Budget Office just announced that this "deal" will actually add $4 Trillion to our national debt over the next 10 years!
And now that we have had so much ado about nothing, the new Congress will have to start out by dealing with the debt ceiling. That's a much more significant fight because it will call into question our legal ability to pay our bills and refinance our debt.
Will the next Congress be any more sensible?
Don't be fooled by the reaction of global markets and rising stock prices. Markets think short term - -and in the short term the entire world is glad the United States didn't destroy its economy with huge tax increases and spending cuts. After all, if America doesn't keep producing and buying, the rest of the world is in deep trouble. So of course the global markets are cheering.
But keep your eye on gold, which though down recently from its highs for last year, responded to the "deal" by jumping nearly $20 per ounce to $1690, while the dollar fell on global markets. Our lack of real fiscal discipline means that big bets are being placed against the future value of the dollar -- even if it is the "least worst" place to hold assets globally.
Kirk Comment: Gold's ETF is GLD: GLD Charts and Quote
What can and should you do? Get back to work, and keep on investing. And speak up! This kind of Congressional confrontation is only possible because so many in Congress find themselves in "safe" seats, because of redistricting. Maybe if they understand they are vulnerable to our votes, they will get something done for America in the next Congress and in the New Year. And that's The Savage Truth.
More about Terry Savage:
- Terry Savage Fan Club
- The Savage Truth on Money
- The New Savage Number: How Much Money Do You Really Need to Retire