Reading Between the Lines of the Debt Ceiling Deal

I was so disgusted by the deal (concessions made) that was reached to raise the debt ceiling. I was so disgusted that I was contemplating not ever taking part in the electoral process of this country ever again. I voted for Barack Obama because he was "Change, I Could Believe In!" Now that we are two plus years into his term, I found myself with that feeling of making a poor hiring decision. Then it hit me, Washington was severely broken under the Bush Administration. The ideological Senator Obama did state that Washington is fractured and would take time to fix; he wanted to reform healthcare, develop new energy policies, and end two wars. So we get a Universal Healthcare Plan (Obamacare) that should have been a Medicare For All plan; a record setting bail-out of the financial and automobile industries; a new fuel efficiency standard that should decrease our carbon footprint (until lobbyist get the next regime to overturn it); and significant troop reduction in Iraq and Afghanistan. Oh yeah, and he gave the “go ahead” on bin Laden.

Iraq and Afghanistan bring me to my point though. President Obama and many other politicians and pundits have noted that the monies spent in Iraq and Afghanistan, if rerouted back home, would go a long way in rebuilding the infrastructure of America. Well, the debt ceiling deal has a second phase. This time there is a "trigger" associated with it. The initial debt ceiling deal cut about $900 billion in spending; with a little over a third of that being defense and security; with a second phase compromise calling for an additional $1.5 trillion in deficit reduction cuts and the raising of the debt ceiling by $1.5 trillion. Balanced budget here we come.

What is that trigger? The trigger calls for an additional $500 billion in cuts from defense if a deal cannot be reached on other deficit reduction agreements. To put this into perspective- the only thing conservatives hate more than taxes, is not being able to have the biggest, most expensive weapons of destruction at their disposal. In addition, where does the defense budget come from? TAXES. If you want to keep your toys, raise taxes. That is where the cuts are slated to take place. I am so glad that Social Security, Medicare and Medicaid were not linked to triggers. The linking of the defense budget does not put our economy in a position to be held for ransom. Does this mean that the defense budget is being held for ransom? Indeed it does. Does it make me feel less safe? Not in the least. Not as insecure as knowing that America is one Congressional compromise (or non-compromise) from recession becoming depression.

I wish that Republicans and Reagan worshippers (that would be you Tea Party) could remember that Reagan raised taxes in '82, '83 and 84 because it was the responsible thing to do. It wasn't about party affiliation. It was about protecting the strength of the dollar. The dollar is the Word of America...and without your word, you have nothing.

Here’s to hoping that “Change, I Can Believe In!” doesn’t require much more patience. Now that the debt ceiling has been raised we can get back to waiting for 2016: when unemployment hits the safe zone of 5%.

Looking for a Job?...Don't Hold Your Breath

Historically, job loss/ high unemployment usually hits and hits hard with an immediate effect. The recovery however, moves at a snail’s pace. Per the diagram below, unemployment was at 10.8% in November of 1982 and did not hit the safe zone of 5% until February of 1989. In the early '90s, unemployment hit 8% and did not reach the safe zone until five years later. In the earlier part of the millennium, it took a little over two years to recover from an unemployment rate of a little over 6%. In March of 2010, the unemployment rate hit 9.7%; now by my calculations based on history, we will hit the safe zone in January of 2016.

Not what you were expecting to hear, huh? Yeah, me either...not sure if the unemployment benefits will continue to be extended indefinitely. In the meantime, we will have three one-term presidents switching control from Democrat to Republican/Tea Party back to Democratic with the 2016 election. While we attempt to stave off a depression, politicians will have us believe that job creation lies within the bill not supported by the other party; all in an attempt to gain control of the White House.

As much as I dislike the blame game, this crisis will always lie with George W. Bush. The lack of domestic oversight (big government)/ regulations has caused a meltdown of epic proportion. So much so that it took the TARP (band aid) and an $800 billion stimulus (tourniquet) that merely halted the crisis, but did nothing to make it better. Here is to that continued job search until 2016...