Happy Times Are About To Come Crashing To A Halt

You thought the fiscal cliff was terrible, and the dysfunction is over. Now we can all get back to doing deals. You thought taxes went up and the yahoos in Washington will work out the sequester on March 1. Forget it. Your world is about to go upside down. Today on the Sunday shows and a couple of days ago, Obama actually said he wants more spending for his favorite contributors, harry Reid continues to say we need higher taxes and no entitlement reform, and today Nancy said taxes need to be raised to the Buffet 30% minimum and on top of that we need to end all deductions to oil companies and that the taxes were not fair yet. When Chris Wallace pointed out that the top 5% pay around 58% of all taxes, she thought that was not fair enough. She then began the usual song about how Republicans want to protect oil companies to the detriment of Pell Grants etc. Obama and the Democrats are saying loudly –there is no spending problem- it is a revenue problem and if we just have higher taxes and more stimulus then the revenue will be there and there is no need to reform any entitlement program. One would wonder what planet they are on.

We are pretty clearly headed for a major disaster to the capital markets and the economy. The Patty Murray budget has higher taxes and essentially no deficit reduction. The Republicans say-we gave you $580 billion of new taxes and that is it. You said give us rate increases and then we can talk about deficit reduction. Now they say there is no need for any reduction,, only higher taxes. We are really going over the cliff this time and it is much uglier than in December. There is little chance the Republicans are giving in a second time. Every poll- despite Nancy denying it, says the voters want major deficit reduction-just not their goodies. A leading neurosurgeon who grew up in the projects of Detroit and made it on his own, and with Obama sitting right next to him, launched into a wonderful speech about how the entitlement society that is being created must end if America is to succeed. He is spot on, but he might as well talk to the wall.