Debt Ceiling Deal

We all should feel very secure this morning!   Why?  Well, not because the debt ceiling deal has been reached that will save us from total collapse.  It is because we again have faith that the government will behave in a very predicable manner that we can then use to make decisions that will affect our livelihood and our families.  We wrote last week that we "guaranteed" that the debt ceiling would be raised at some point, which really only means we have a firm grasp of the obvious.   Well, at lease it seems obvious to anyone that understands human nature, politics, and our political and economic systems.  Everything that went on in Washington over the last few weeks was nothing more than a game, a circus act, smoke and mirrors, and a sideshow to the real problems we face.

This debt ceiling deal is again proof of the above statements.  Take a look at this graphic from the Washington Post this morning that summarizes the deal at a high level.  First, they are raising the debt ceiling $2.4 trillion now, and then cutting $1 trillion over 10 years??   The debt ceiling will need to be raised again in 2013, which means at least another $2.4 trillion at that time, and so on, until we get down the road ten years and we have raised it another $10 trillion!  Second, this new committee is now responsible for making the tough decisions?  What did we elect these politicians for anyway, to punt the big problems to a special committee? Third, even if the "enforcement measures" are put in place, that's only another $1.2 trillion.  Folks, the total U.S. Unfunded Liabilies are nearly $115 trillion dollars!!

The bottom line is that you can be guaranteed that the government will continue to spend money at a record pace in the future, which will further decrease the value of the dollar and increase the value of all "hard" assets.  Please contact you investment advisor and make sure your portfolio is positioned to protect you and your family from these certain events.

Source:  Washington Post

Debt Ceiling Deal, Debt Ceiling Limit, Debt Crisis, National Debt, U.S. Debt Limit