Real Estate Underwriting Needs To Change

The only word to describe what is happening in Washington with the fiscal negotiations is disgusting.  We had Simpson Bowles which Obama appointed and most objective observers think is the best way to get to a true deficit reduction. Then we had Rivlin Domenici, The Gang of Six and last year the almost agreement between Boehner and Obama. Now we seem to be in a stupid war of the Democrats thinking they got some sort of mandate to raise taxes on most of you reading this and to then spend more. The audacity to suggest that he have sole dictatorial right to raise the debt ceiling is the height of  arrogance. The last time I read the constitution it is the House that controls such things. We have a giant spending problem, and while revenues must go up, that is a drop in the ocean of a tidal wave of debt that will wreck the country. After listening to the Sunday morning talk shows it is clear that the Democrats think raising rates on a few successful people is all they need to do. Revenue is revenue, whether from capping or eliminating deductions or raising rates –a dollar of cash inflow is a dollar of cash inflow. It is not a religious edit that rates have to go back to 39.5%. Obama won but he only got the votes of 26% of all eligible voters and only 36% of all registered voters. That is not a mandate. The Republicans retained total control of the House and it is the House that passes revenue laws. To say it is not fair that guys like me pay 70% of all income taxes and 47% pay zero, and we are not paying enough is just pandering, but it sure sounded good to people paying little or nothing.

It is all about entitlement spending which is going to drown the nation and disrupt the capital markets for all of us who depend on smoothly functioning capital markets to succeed in our chosen business. The real debt is $86 trillion and growing rapidly. Given that the world is highly likely to be on a slow growth mode for the next several years, it is absurd to think we can just grow our way out of this mess. That is impossible.