I don’t know about you. But for me, Thanksgiving is one of my all time favorite holidays. I love getting together with family and friends, eating my fill of turkey, watching football, and just enjoying the time off. I hope your holiday was as great as mine!
Meanwhile, the fiscal cliff negotiations are really coming down to the wire in Washington. We got a bout of happy talk from Republicans and Democrats in Congress, not to mention the President, a few days ago. That spurred a short-term market rally.
But the reality is that we are careening toward this deadline just as we have toward every other deadline over the past few years. And I’m skeptical Washington can come to a comprehensive, effective deal in time!
We Lived beyond Our Means for Too Long —
Now We Have to Pay the Bill!
Lost in all the talk about the fiscal cliff is why we’re facing one in the first place. Yes, the cliff is technically the result of the debt ceiling negotiations in 2011. The idea was to come up with such widespread tax hikes and spending cuts that Congress would be FORCED to come up with some kind of plan to tackle our budget deficit and debt problems.
But the underlying problem is much bigger: We’ve lived beyond our means as a country for far too long! We’ve run up four years of $1 trillion-plus budget deficits, and racked up almost $16.3 trillion in debt.
We’ve made Social Security and Medicare promises that we simply can’t afford to keep. And we have consistently avoided tackling those thorny issues — under both Democratic and Republican administrations.
|The President and Congressional leaders are running out of time to come up with a solution to the fiscal cliff.|
The few times serious people actually did try to come up with solutions, policymakers basically ignored them! The National Commission on Fiscal Responsibility and Reform released its landmark report, The Moment of Truth, almost TWO YEARS AGO to the day. But since then, it’s been sitting on a shelf gathering dust.
So if you’re wondering why I’m so skeptical about the ability of Washington to get something done in time to avert the cliff, it’s not because I’m a pessimist by nature. It’s because politicians have been failing to confront our debt and deficit challenges in a serious, bipartisan, effective manner for YEARS now.
Long story short?
I believe we could be in for an increasingly bumpy ride as investors in the weeks ahead. So if you haven’t yet taken the protective steps I’ve outlined in my Money and Markets columns over the past few months, I recommend you do so very soon. And for even more specifc, actionable advice, give my Safe Money Report a look. You can do so now at a price of just 13 cents per day — something to be thankful for for sure!
Until next time,