The government is in a mess – too much debt and no clear direction regarding taxes for businesses and individuals. Without a clear definition of what to expect, uncertainty reigns supreme. Politicians from Congress seem caught up in being re-elected. That’s not a surprise.
The president is not running for re-election at the moment. (That will come soon, but, thankfully, we are still enjoying a respite from what seemed like the longest campaign ever.) He seems to be avoiding exercising leadership at all costs and is paralyzed by facts, doesn’t he?
Fact No. 1: The federal government has huge debts.
Fact No. 2: Taxes will have to be raised.
Fact No. 3: We are (hopefully) at the dismal end of a recession, but the country has high unemployment, and folks don’t have much money.
What the investment world hates is the unknown. If investors don’t know about taxes and debt, much isn’t going to happen. I think the president and members of both houses of Congress are paralyzed by fear, and this inaction is making everything worse. What do you think?
Rumor has it the Bush tax cuts may be extended through the end of 2011 – the fear is that anything sudden, such as higher taxes right away, could again disrupt our fragile and slow-moving recovery. It would be nice if someone would stand up and say, “Yes, they will be extended,” or “No, they won’t.”
I’m just returned from a road trip of about 1,900 miles. People are packing restaurants in the middle of the country, and the mood seems good. The University of Michigan had the largest crowd for the Michigan-Connecticut game in the history of college football. I got the impression the U.S. is not about to sink into an economic quagmire any day soon; however, some real leadership would be nice.
Have the best week ever. Enjoy the beginning of fall, a time of crisp days and chilly nights. People usually feel pretty darn good in the fall – I hope you do.
Check out more blog entries from Richard Hoe.