Empires have come and gone. Some lasted a blink of an eye and some millennia.
The question is, after 9/11, the rise of China and a great financial crisis, where does the U.S. empire stack up to its predecessors?
Well, it seems the one commonality they all have is the point when their might was undermined by sloth and greed. And entitlements: free bread and circuses. For some it took years, others centuries.
Here, in a compelling and unique address, is what Romulus Augustus, the last emperor of the Roman Empire, might say to President Obama now about how to keep America great.
Read on and share with family and friends...
- DON’T BE SO ARROGANT, MR. PRESIDENT
- Myths and Realities About the U.S. Economy
- Sequestration Is a Gift – Not an Apocalypse
- Recession 2013: Can We Avoid It?
- The Greatest Investing Mistake You'll Ever Make
- The Fiscal Cliff Deal Just Made Bonds Even More Risky in 2013
- Fiscal Cliff Deal Tax Changes for 2013
- $1 Trillion Coin Isn’t the Right Answer to Our Debt Ceiling Crisis
- Here's Why The Fiscal Cliff Deal is Great News For Dividend Stocks
- Why The Fiscal Cliff "Deal" is Spelled P-O-R-K
- Fiscal Cliff Deal Gives Energy Investors the Chance to Make a Bundle
- The Cold Hard Truth About the Fiscal Cliff Deal
- Stock Market Today: Fiscal Cliff Deal Leads to Rally
- What the Fiscal Cliff Deal Could Cost You
- Fiscal Cliff Deal Averts the Crisis… But Now What?
- What if There's No Fiscal Cliff Deal?
Empires have come and gone. Some lasted a blink of an eye and some millennia.
When it comes to the U.S. economy, myths and misleading statistics abound.
Are taxes the highest they've ever been? Is the country's spending at record levels? Are the majority of products U.S. consumers buy produced by low-wage workers overseas?
The answer often depends on the spin.
But this Bureau of Economic Analysis presentation on myths and misperceptions about the U.S. economy gives investors a sense of what's real and what's the twisted truth.
Everybody sing along...
It's a happy day... Oh happy days. It's a happy day...Oh happy days. When sequestration rules it drives the tears away... Oh happy days!
Those are the words President Obama used to describe what would result from sequestration.
Please, don't make me laugh. The sequester will not only not ruin America, it will in fact start the process of fixing what Congress can't - no, make that won't - fix.
What's the upside?
Our magnificent Founding Fathers were all together in the creation of the United States, but it didn't mean they all loved each other or that they all had the same views about government. They sure didn't. But, those differences were acknowledged and incorporated into the Constitution and sanctified - for the people - in the Bill of Rights.
That's divided government folks. This ain't socialism, though sometimes it feels like it.
And it's that nagging feeling that a slimy, slithering strain of socialism is snaking its way into mainstream politics that keeps me up at night, in case we, the people, are overrun by "them" - the usurpers of republican democracy.
Thank goodness that divided government gave us sequestration.
So, Congress can't get along. That's nothing new. The question is who gets to pander to their constituents. That's nothing new. We have sequestration. So, what? That's nothing new.
We need to cut crap out of the budget - A lot of crap. I'm sorry if that word bothers you... but I'm not allowed to use stronger language. Don't hate me because I'm fed up. You should be, too. Maybe you don't use strong language. Maybe you don't use colloquialisms (you're better then me, I grant you that, for sure) but I'm willing to bet that you're just as mad as I am.
The Republicans want to protect the rich and their tax loopholes - including carried interest. I get that, and I vehemently disagree (and believe me, folks, I enjoy carried interest). The Democrats want us all to share the cost of running a social welfare state to pander to their voting constituents. I get that, and I vehemently disagree.
So, they can't agree on tax increases (oh, wait, wait don't tell me... they did agree on $600 billion in tax increases in January, remember?) and they definitely can't agree on spending cuts. Why are spending cuts so hard? Because, silly, spending is the bread and butter that Congress feeds to their voting constituents - and campaign-backing cronies. Duh!
Sorry, I got carried away. Forget all that stuff. I just had to get it off my chest.
This is really about sequestration and how good it will be for the country.
We need to cut wasteful spending, period. What better way to do it that to take spending cuts out of the hands of Congress and put the task squarely in the hands of the departments and programs that are wasting the money in the first place? They should be tasked with making cuts and laying off unproductive people who do unproductive things. This is great!
The Budget Control Act, passed in August 2011, basically said, "Hey, if this Super Committee we put together can't cut $1.2 trillion from the federal budget over the next ten years (they were shooting for $1.5 trillion, go figure) then, by this law, sequestration will go into place to the tune of $1.2 trillion between January 2013 and October 2121."
Pretty simple, but no one figured we'd get here. Me, personally? I was praying we would.
Here's a brilliant, simple play-by-play I found from Brustein & Manasevit, PLLC, Attorneys at Law:
The U.S. economy is currently two-for-two in its attempts to skirt recession 2013.
The first came after we narrowly avoided a tumble over the fiscal cliff with a down-to-the-wire deal on New Year's Day. The second came Wednesday with the passage of a three-month extension on raising the debt ceiling.
I wrote an article on Tuesday - "The Great Rotation Makes Stocks a Generational Buy" - that drew several comments from readers - some in agreement, others... not so much.
For instance, reader Mike W. wrote in quoting the article: "Last week $22 billion flowed into mutual funds and ETFs. That's the second-largest weekly flow on record. Of that... $8.9 billion flowed into equity mutual funds... the most since March 2000 and the fourth-largest weekly inflow on record."
He continued: "What happened after the [largest] inflow of $23 billion in late 2007? The stock market fell off a cliff. What happened after March of 2000? The stock market fell off a cliff."
True. But <a href="https://moneymorning.com/2013/01/18/the-greatest-investing-mistake-youll-ever-make/"there's much more to this story...
Going over the fiscal cliff would have been very bullish for long-term U.S. Treasuries. But that didn't happen.
Instead we got a deal with modest tax increases, tiny spending cuts, and some $64 billion worth of tax-exemption pork.
Since then, 10-year notes yields have been on the rise, jumping by as much as 23 basis points since New Year’s Eve. Bonds have become toxic enough to make you wonder whether or not the bond bubble has sprung a leak.
But there’s quite a bit more to this story than just Treasuries. Suddenly prime corporates, mortgage bonds, junk bonds, and even emerging market bonds are at greater risk, too.
Here's what you need to know...
April 15 is now just three months away. As you start gathering documents to file, you need to know about a few brand-new tax laws from the fiscal cliff deal. Check it out.
It sounds silly, but the idea is gaining traction: Simply mint one coin worth $1 trillion, deposit it at the Fed, and avoid hitting the debt ceiling. But what would that do to the U.S. economy? Here's the real deal.
But a funny thing happened on the way to this great apocalypse...
Dividend stocks are not only alive and well, but stronger than ever.
For most dividend investors, the only real difference is that these tax rates are permanent - there's no 10-year horizon, as there was with the previous 15% dividend tax rate. So investment planning just got a bit easier.
The bottom line: There are now three good reasons why dividend stocks are irresistible...
Behind the scenes of the Fiscal Cliff debate, there was plenty of f-bombing, poison pilling, and grandstanding leading up to the deal - and that was before the members of Congress and the Senate actually got serious with their usual ultimatums, followed by earnest- looking sound bites and posturing. But what gets me really riled up is the amount of "pork" contained in the bill...
Start the conversation
You know the one. It's called Congress.
And after much political jockeying and self-serving speeches from a largely empty floor, the House finally voted to pass the Senate's stopgap fiscal cliff Band-Aid.
Of course, the nation had technically fallen over the cliff after midnight January 1, but the holiday spared anybody inside the Beltway the problem of determining what that actually meant.
Welcome to the ongoing way of governing in Washington. It's called brinksmanship. Along the way, America has dodged another political bullet.
According to the deal, income taxes are going up for individuals making $400,000 or couples earning $450,000 or more; unemployment compensation has been saved; the sequestration of automatic expenditure cuts has been delayed.
But let's face it, two months from now, when the debt ceiling comes up for another debate, we will head right back into crisis mode. In the long-term view, nothing has changed.
In the interim, though, we are going to make some serious money in the energy sector.
How long that advance goes on is an open question. But there is one overriding factor in all of this.
And the sooner you know what it is, the sooner you'll be ready to profit. Here's what I mean...
In the waning hours of New Year's Day, Congress voted to avoid a large package of tax increases, along with some modest spending cuts.
Not surprisingly, the markets just loved it. The Dow soared over 200 points on the open and never looked back.
But first, let's call this deal what it is: a late-day compromise that failed to address serious fiscal issues.
In the end, the agreement reached on Tuesday night will only reduce the deficit by about $60 billion annually over the next 10 years.
That's less than 10% of the total projected deficits, which means well before 2020 we will likely have a real crisis on our hands.
But the real story in this mess is this: the cold hard truth is that going over the cliff would have actually been beneficial. And despite the promises of Keynesian economists, the deal that emerged was not an improvement.
In reality, the predictions of doom that surrounded the fiscal cliff were made to achieve a political goal, and we should have ignored them.
Start the conversation
Right out of the gate, all three major indexes jumped. Just before 2 p.m., the Dow Jones Industrial Average had climbed 232 points. The Standard & Poor's 500 Index jumped 25 points, and the Nasdaq rose 70 as markets cheered the news.
"We are happy that we are halfway home to fixing the fiscal cliff; we figured out the revenue side and delayed the spending side," Art Hogan, market strategist at Lazard Capital Markets LLC, told MarketWatch.
The rally followed a late surge Monday, New Year's Eve, when word emerged from Capitol Hill that progress had been made in the fiscal cliff talks, sending the Dow up 166 points by the session's close.
For 2012, the Dow added 7.3%, ending at 13,104.14. The S&P gained 13.4% to finish the year at 1,426.19, and the tech heavy Nasdaq added 15.9% to end 2012 at 3,019.51.
The rally in the stock market today came as investors breathed a sigh of relief that at least a partial deal had been reached.
"What's been hanging over the markets for the last couple of months has finally been released. The rally today (Wednesday) is 100% about the end of the fiscal cliff, and people are buying with both hands," Sean Kelly, a managing director at Knight Capital Group, told CNN Money.
But many analysts cautioned that gains in the stock market today were nothing more than a rally based on relief over the fiscal cliff deal and said the gains may be short-lived.
Start the conversation
The proposed deal then headed to the Republican-controlled House on New Year's Day, expected to meet at least some opposition from a party that has lobbied during most of the fiscal cliff negations for no tax increases at all. It went through with a 257 - 167 House vote.
At the deal's forefront was maintaining tax cuts for singles earning less than $400,000 and couples earning less than $450,000. The tax increase marks the first time in two decades that rates will rise for the wealthiest Americans.
While it does save millions of middle-class taxpayers from increases, workers will still feel the pinch because the payroll tax holiday has expired.
Also saved were benefits for some two million unemployed workers who were on the brink of losing their federal checks.
The measure postpones the biggest and thorniest part of the fiscal cliff deal until March, when Congress will again have to wrangle over steep spending cuts that were set to kick in on Wednesday to defense and other industries.
Plus, nothing was resolved regarding the $16.4 trillion debt ceiling that we reached Monday.
Here are a few major changes that will hit your paycheck and savings.
Passed by a 257 to 167 vote, the bill is now headed to the White House and a draft may even be on the President's desk by the time you read this.
So I'll have to write quickly.
Here's the scoop on the fiscal cliff deal:
- The Bush-era income tax cuts become permanent for the majority of workers while they expire for so-called "top" earners. The break is at $400,000 for individuals and $450,000 for couples. That's approximately double Obama's campaign level and 80% more than his preferred "married couples rate" according to various sources. Dividend tax rates and capital gains rates for top earners will rise to 23.8% while personal exemptions and itemized deductions that are presently in force expire for individuals earning more than $250,000 and married couples earning more than $300,000. The alternative minimum tax is now fixed to avoid snagging still more middle class households.
- Expanded unemployment benefits will continue.
- Automatic spending cuts are deferred for two months.
- A two percent payroll tax cut expires.
- Estate taxes will get an inflation indexed exemption of $5 million or more and taxes will top out at 40%.
Key takeaways on the agreement:
- Once again Washington is kicking the can down the road. While it's already being played up by both parties as an example of bipartisanship, it's really a load of hooey. The bill merely puts off decisions for yet another round of fiscal follies a few months from now.