So much for the “fix”

We did a post last week concerning the July 24 prediction made by Secretary of the Treasury, Timothy Geitner, that, if a “debt ceiling” deal wasn’t reached that afternoon, our stock markets would tumble dramatically on Monday, July 25.  The DOW did fall by 88 that Monday.  Certainly not good, but hardly the calamity predicted.

During the ensuing week, we received many comments, with some giving us a daily review of each day’s DOW closing average.  The DOW declined every day that week, but the worst decline was Tuesday, August 2 when the average closed down by 266.

If Mr. Geithner was correct, and the DOW would react to our failure to raise the debt ceiling, why did the DOW’s worst day happen after we raised the debt ceiling?

I am definitely not an expert on this subject, but, a few things come to mind.  The market was not so much concerned about our debt ceiling, but, about our debt.  The “deal” did little about that.  The President can freely spend $2.4 trillion in the next 18 months over and above what the government collects in taxes, taking our overall debt up to almost $17 trillion.  Why would that cheer the markets?

Any spending cuts that would measurably lower any annual deficits, will not happen now, but, years from now, if at all.  Why would that cheer the markets?

Unemployment is still “unexpectedly” above 9%.

Businesses are not hiring…what’s the cost of Obamacare, what’s the cost of new EPA regulations, will the NLRB prohibit unionized businesses from relocating to “right to work” states, will the expiration of the Bush tax cuts require my business to pay more taxes 17 months from now?

If we do not get our spending under control now, and reduce uncertainty for business, we will never have a fix.

18 replies
    • BrianforPeace
      BrianforPeace says:

      Sound Off Sister, you have nailed the heart of the matter. Business knows that getting spending under control, and coupling that with a sane and fair tax system that includes incentives for the business sector, there will be no recovery in any real sense. The ” Debt Deal” that the House and Senate are now celebrating on their way home to their angry constituents is not a “deal” at all. It is a big, fat NOTHING! Wall street knows this; hence, it’s lackluster response. This legislation changes nothing. It does not control spending, it does not address revenue which is a function of market stability and productivity, NOT raising tax rates on the rich or anyone else. All it really does is what D.C. politicos do best: (football analogy) defer and knock the pass down to stop the clock, giving them more time to write additional self-serving legislation for reintroduction in 3-6 months. They call it “kicking the can down the road.” I call it cowardice and SNAFU for both the legislative and executive branches. Until this practice stops, and the President shows real leadership and does something at the White House other than campaigning for his next re-election season, then your…

      • BrianforPeace
        BrianforPeace says:

        ……prediction that we will never have a fix will certainly come to pass. Lowering taxes for individuals AND business raises federal revenues far more effectively than class warfare ever will. Reagan knew this. Even JFK, the last decent Democratic president knew this. Wealth is created in the private sector, never through public spending. A rising tide lifts all boats. Congress must go back to school to learn this simple, but undeniable fact.? (sorry about the run-on post – I ran out of space on the last one. Just read them as one, and all is good. I must learn to live with this 1250 character limit!)

  1. Plainvillian
    Plainvillian says:

    In one of his books, didn’t Mr.Obama admit that he had at one time participated in street commerce involving temporary fixes?? Is this fix any more valuable??

  2. sammy22
    sammy22 says:

    Nice? SOS. At least you admitted that “I am definitely not?an expert?on this subject”, which was followed by a “but” which negated the previous sentence. Not surprisingly, the Tea Party supporters are “washing their hands” on the consequences of the legislation they had a large role in forging.

  3. Shared Sacrifice
    Shared Sacrifice says:

    I hope all of this rigamarole about revenue and spending doesn’t get in the way of my free Obama-Care!?? As surely as someone else payed for my education, someone’s got to pay for my healthcare!? And surely you silly conservatives can concede one logical fact:? It’s not free and it’s not an entitlement unless someone else is paying for it!

  4. sammy22
    sammy22 says:

    Retired people pay a premium for health care every month even though they paid for Medicare all their working lives. Still the Right squawks.

  5. Lynn
    Lynn says:

    Oh Please.? Let’s try looking at the exact dollar amount paid to Medicare compared to what will be paid out to people. Life expectancy was not so long when it started. And don’t say I am wishing for people to die. Obama did that in his Obamacare.

  6. sammy22
    sammy22 says:

    You got spending cuts AND no tax increase: the market sure loves it! And Lynn, Medicare recipients were paying premiums for Part B years before Obamacare was enacted.

    • Lynn
      Lynn says:

      Sammy, You? missed the point it doesn’t make any difference that it was before Obamacare. The statistics are that people pay in less from whenever they start to pay in than what they will receive. The reference was, I did not want this to be interpreted that I wanted people to have shorter lives, and I don’t think Older people should be required to listen to “how to end their Life” as is part of Obamacare.

  7. sammy22
    sammy22 says:

    And then again, the Repubs may have been? “afraid” that if they did not vote for a “fix”, the economy would have REALLY suffered. We will not know what would have happened w/o the “fix” .

    • Dimsdale
      Dimsdale says:

      Well, we know what happened with ?bama and the Democrat’s fix.? And the bonding agencies have been afraid as well.

    • Dimsdale
      Dimsdale says:

      If you call not getting more cuts and some of Ryan’s plan implemented, then yes, they had to do something.? But where is the Senate budget?? Where is the president’s revised budget?
      Dragging the Republicans into a half baked “fix” was part of the plan.

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