04 Jan 2013

Posted at 13:36h in The Friday Brief by
The opening salvos of the deficit war of 2013 have landed with only modest economic and political damage inflicted so far. Mitch McConnell and Joe Biden met under a white flag in the waning hours of 2012 to craft a brief truce to avoid tax hikes that would have crippled the economy. The vast majority of Americans, 99% of them, will keep their current tax rates, though all will see their payroll taxes rise by 2% after a two-year holiday. Unfortunately though, nothing was done to address the nation’s biggest threat – the deficit. The US government still borrows 36 cents of every dollar it spends, at a rate of $1 trillion a year. Those who would change that are ready for a fight.

28 Dec 2012

Posted at 14:45h in The Friday Brief by
Years ago, my brother worked for the Naval Air Rework Facility at Marine Airbase Cherry Point, NC. Each year he would tell us incredible stories of how the military handled surplus near the end of a budget year. One of those years he noticed some large bulldozers digging a ditch roughly 25 feet deep and fifty yards long.  There was nothing unusual about that sight, until he saw that they were refilling it with brand new diesel generators and a host of other pieces of unused, even boxed equipment. So with the books balanced, they covered them over and drove away.

21 Dec 2012

Posted at 13:21h in The Friday Brief by
What's it gonna be fellas? Or a more reasoned approach? It’s back to the playbook now that House Speaker John Boehner has scrapped his own Plan B. He said he couldn’t muster enough Republicans in his caucus willing to vote for a tax increase – even though it would impact fewer than 1% of Americans. It is also quite likely that those Republicans didn’t see enough spending cuts coming from the White House to agree to a Plan B.

14 Dec 2012

Posted at 14:04h in The Friday Brief by
The US economy likely slowed substantially in this current quarter under the weight of political uncertainty. The best clue comes from Federal Reserve Chairman Ben Bernanke who said, “Clearly the fiscal cliff is having effects on the economy," he said, referring to the combination of expiring tax cuts and scheduled spending cuts set to begin early next month. "This is a major risk factor right now.”