The 9 Biggest Sequestration Lies
Though we've come to expect no better from our leaders in Washington, the sequestration lies rank among the most blatant whoppers ever to come out of the nation's capital.
Sequestration, of course, is the $85 billion in across-the-board spending cuts scheduled to go into effect at midnight Friday.
Instead of working together to come up with an alternative to replace the sequester, Republicans and Democrats have spent the past several weeks playing a maddening game of political chicken.
Both parties were counting on the fear of sequestration to force the other to cave before it happened.
Toward that end, leaders of both sides have tried to sway public opinion with exaggerations, obfuscations and outright lies.
Yes, business as usual in Washington, but an affront to U.S. citizens nonetheless.
Here are some of the biggest sequestration lies.
What Does the Sequestration Mean for Investors?
After months of bitter debate on Capitol Hill, claims and counterclaims and predictions of impending economic doom, sequestration arrives at last Friday, barring an unexpected last-minute deal.
And thus far, the markets seem to have pretty much shrugged off the impending $85 billion in automatic spending cuts.
Indeed, the Dow Jones Industrial Average soared to near-record levels Wednesday, ending the day up 1.25% to 14,075, while the S&P 500 and the Nasdaq also posted more than 1% gains.
This despite warnings from U.S. President Barack Obama and other Democrats that sequestration would send the economy back into a recession and possibly cost 1 million Americans their jobs.
The Sequester: What the President Should Do – But Won't
It's just days before the $85 billion in across-the-board spending cuts known as sequester are set to kick in and the Obama administration says the reductions would drastically hurt essential programs, including national defense, education and medical research.
Republicans, meanwhile, maintain that U.S. President Barack Obama doesn't recognize the problem isn't the sequester.
It's "an excessive, bloated, big federal government that's highly inefficient and highly ineffective," according to Sen. Tom Coburn, R-OK, on FOX News Sunday.
While Coburn said he would rein in spending through a different method than the sequester, some GOP lawmakers are ready to let the automatic spending cuts take effect in their current form.
As Money Morning Global Investing Strategist Martin Hutchinson explained in the accompanying video, the sequester should have been made part of a long-term deficit reduction plan.
The Sequestration Follies: How Washington Outsmarted Itself
It seems every politician in Washington is up in arms over sequestration, the devastating automatic budget cuts on track to take effect March 1.
For weeks, lawmakers on both sides have been calling sequestration a "bad idea" and criticizing any proposals put forth by the opposing party.
Politicians aren't happy that sequestration not only would cut billions of dollars in federal spending, it would also slash the budget indiscriminately with across-the-board cuts.
Just today (Tuesday), President Barack Obama urged Congress to delay sequestration for the rest of the year or risk damaging the U.S. economy.
"It won't help the economy. It won't create jobs. It will visit hardship on a whole lot of people," President Obama said. "If Congress allows this meat-cleaver approach to take place, it will jeopardize our military readiness; it will eviscerate job-creating investments in education and energy and medical research."
Listening to all the rhetoric, Americans with short memories might believe that those in Washington only have the best interests of the country at heart.
But the rest of us remember how this whole sequestration fiasco really happened. It was their idea – Republicans and Democrats, the White House and Congress. All guilty.
"The idea was that no sane person would allow such cuts to happen," Bob Schieffer, host of CBS News' "Face the Nation," said on that show Sunday. "Well, guess what. Even Washington managed to underestimate its own ineptitude."
Five State of the Union Bullet Points You Need to Know
Since President Obama's State of the Union Address Tuesday night, there have been a lot of articles dissecting his remarks and picking his proposals apart. As you might suspect, the vast majority have been politically charged by one side of the aisle or the other.
As Chief Investment Strategist for Money Map Press, I can't afford the luxury of taking sides. It's my job to help the hundreds of thousands of investors who are part of our family with their money…politics aside.
If you're with me, then I've got five bullet points – key takeaways really – from the president's speech that can help you grow your money this year and for the remainder of President Obama's second term.
Will Environmentalists Kill the Keystone XL Pipeline?
For more than four years, the controversial Keystone XL pipeline has been at the center of a heated battle between opponents and supporters.
Those who favor the 1,700-mile extension of the pipeline see it as a step toward North American energy independence and a source of tens of thousands of jobs.
But opponents say the Canadian-U.S pipeline would contribute to global warming and causeirreparable harm to the environment.
On Wednesday, about 50 opponents protested against the Keystone pipeline outside the White House, chanting, "Hey, Obama, we don't want no climate change drama."
The protesters, many of whom were arrested, included actress Daryl Hannah, Sierra Club Executive Director Michael Brune, renowned climate scientist James E. Hansen and civil rights veteran Julian Bonds.
Underscoring the intensity of environmentalists' opposition to the pipeline, the protest marked the first time the venerable, 120-year-old Sierra Club's board had approved an act of civil disobedience.
"It's awful hard to reconcile wanting to reduce greenhouse gas emissions with the dirtiest oil project in the country," Brune said. "The president gets this, he understands this challenge, and we're here to ensure his ambitions rise to the level of the challenge."
Obama's State of the Union Address Was Short on Math
President Obama's State of the Union Address on Wednesday night was high on rhetoric but short on math.
As with most Obama speeches, it was beautifully delivered. However, even where I agreed with the ideas, I couldn't quell a nagging suspicion that the numbers simply didn't add up, and indeed likely missed by a lot.
And let's face it, some of the ideas in the speech were just plain bad.
The Bad Ideas
At the top of the list was the proposed increase in the minimum wage to $9 an hour. It's sounds nice, but reality is a different story.
Economists pretty much universally agree that high minimum wages have the opposite effect: They increase the ranks of the unemployed.
Will John Kerry Kill the Keystone XL Pipeline?
When new U.S. Secretary of State John Kerry met Friday with Canadian Foreign Minister John Baird in Washington, the talk turned to the fate of the controversial Keystone XL pipeline.
Kerry said the controversial $7 billion Keystone XL pipeline project would undergo a "fair and transparent review," adding he expects to make a decision "near-term" on whether to move forward with it. The State Department has final say over the pipeline because it traverses international borders.
According to a department spokeswoman, a decision is likely at the end of March. But Reuters reported an unidentified U.S. official said the decision could be pushed back until June.
Canada is committed to the pipeline, and Baird lobbied hard for it during the meeting with Kerry. After the meeting, Baird called the Keystone XL pipeline a "huge priority."
Government S&P Lawsuit: Who's Next?
But the collateral damage could spell bad news for a number of parties and has implications even for the overall health of the U.S. economy.
The Justice Dept., joined by attorneys general from 16 states, unveiled a case accusing S&P of fudging its ratings of subprime mortgages to make the toxic securities appear better than they were.
The federal government is seeking $5 billion in penalties — more than five times what S&P made in 2011 — to cover losses to investors in federally insured banks and credit unions. Separate suits filed by individual states could more than double that figure.
It's the first time the government has taken action against a credit rating agency over illegal behavior tied to the recent financial crisis.