Dear Elected Officials in Washington….JUST DO YOUR JOB PLEASE

After the latest turn of events in Washington, I thought it was time to try and make sense out of the mess our country is in. A Blog is a forum to share ones opinion, and let me start off by saying I am not registered in any political party, I’m considered a blank at the Election Office, and do not want to offend anyone with my views.

Where have our esteemed elected officials been for the last 15 months? Oh that’s right, they were out campaigning to stay on a job that they don’t want to do, or they don’t know how to do, either way the country is getting ready to fall off the Fiscal Cliff with a possible recession on the horizon because of their dysfunctional ways.

“Fiscal cliff” is the popular shorthand term used to describe the conundrum that the U.S. government will face at the end of 2012, when the terms of the Budget Control Act of 2011 are scheduled to go into effect. Among the laws set to change at midnight on December 31, 2012, are the end of last year’s temporary payroll tax cuts (resulting in a 2% tax increase for workers), the end of certain tax breaks for businesses, shifts in the alternative minimum tax that would take a larger bite, the end of the tax cuts from 2001-2003, and the beginning of taxes related to President Obama’s health care law. At the same time, the spending cuts agreed upon as part of the debt ceiling deal of 2011 will begin to go into effect. According to Barron’s, over 1,000 government programs – including the defense budget and Medicare are in line for “deep, automatic cuts.”

President Obama is adamant that he wants to tax the rich any way he can, families earning $250k or more, and he doesn’t want to tackle the big problem of spending. The Leader of the House, John Boehner, has compromised on tax increases by asking those that earn over $1m to pay more as long as the President deals with spending concessions.  We are 10 days away from driving off the cliff and the country needs both sides of the aisle to stop blaming the other side and negotiate a solution that will be good for the entire country. This is what they were elected to do, so it’s time that they do it or resign and let’s start from scratch. I was told we need experienced lawmakers in Washington who know the ropes in order to get things done, but if this is how it’s getting done, then I would have to ask why do we need any of them?

Even if President Obama gets his way and sticks it to the Republicans and taxes the so called rich, it will only generate approximately $82 billion a year which doesn’t even come close to the $1 trillion plus deficit we’re racking up each year. This annual deficit gets added on to the $16 trillion plus of debt the country is in and it’s only a matter of time before we are looking a lot like Greece. The country needs to deal with entitlement programs like social security, Medicaid and Medicare along with reforming the tax code, reducing our compounding interest payments to the country’s bond holders (50% of them are foreigners) and last but not least, health care which will only get worse when Obama Care kicks in. I can go into detail on each of these issues, but it would take too long, so if you want to get a better perspective on how to fix the debt, Alan Simpson and Erskine Bowles who spearheaded the National Commission on Fiscal Responsibility and Reform for President Obama, created an informative website www.fixthedebt.org . It’s too bad that President Obama didn’t take some of this bi-partisan group’s advice when he asked for it two years ago, the Simpson-Bowles Plan wasn’t perfect, but it was better than nothing and the United States would have kept its Triple AAA credit rating and avoided this looming disaster before us.

My opinion for investors is to check their portfolio and make sure it is diversified between stocks, bonds, alternative assets and cash to match their tolerance for risk. I don’t feel long-term investors should be running for the hills as I do believe one way or another, Washington will come up with some kind of solution, and once that happens  I’m hopeful the markets will continue to rally. The fundamentals of the stock market are good, corporations are generating handsome profits and they have more cash on their balance sheets than ever before. The economy is growing, ever be it so slowly but it’s going in the right direction, and we are putting people back to work, not as fast as we need to but unemployment is coming down. Looking ahead, there is more optimism for stocks especially after we deal with fiscal matters in the right manner.

To summarize…. tax increases aren’t good in any bad economy, it sends the wrong message to businesses who may not hire as many people and that’s what this country needs now more than ever, to reduce unemployment which will be the catalyst for the economy to grow. As for taxing people who earn more than $250k, are you kidding me, in most major metropolitan areas that is not a lot of money and these people don’t look or feel like millionaires. The key to resolving our debt problem is with spending cuts and reforming entitlement programs, this is where we can make a difference down the road and it can be done in a way where folks who are using these services now won’t be affected. President Obama wasn’t re-elected by an overwhelming majority of voters, he won by a small margin which means that there are almost as many people who do not agree with his mandates, the best thing he can do for this country now is to act like a LEADER.

Mr. President, Members of the House and the Senate, please somehow some way deal with our problems and make your constituents proud, but do not kick the can down the road any longer, we can’t afford that.