A hard-fought election campaign in which billions of dollars were spent brought us to exactly where we started – with President Obama in the White House and a divided Congress, and now a lame-duck session that carries the weighty responsibility of shepherding the nation past the fiscal cliff.
So says Andy Friedman, political analyst with The Washington Update and a regular on the advisor lecture circuit, in a post-election commentary about the strangely familiar political landscape and the effect investors can expect in financial markets.
Friedman said, “Presidents spend their first terms worried about getting re-elected. They spend their second terms worrying about their legacy.”
That legacy depends heavily on the massive federal budget deficit, a problem that he says cannot be solved without reforming Social Security, Medicare and the tax code. It remains to be seen whether the president will follow through on a statement he made last month that he would address the deficit early in his second term.
There will be no respite for legislators in the balance of this year, as the expiration of Bush-era tax cuts and severe spending cuts mandated by Congress last year are scheduled to take effect in 2013, a combined fiscal jolt that is widely projected to throw the economy back into recession.