What's Up With The Economy, The Deficit...

That is a really good question, "What's Up With the Economy?"!  The best analogy is the economy is sorta like a really nice business train that is slowly chugging along and starting to lose passengers at each stop.  I think this is an accurate picture because the data is definitely mixed, showing corporate businesses are doing quite well and chugging along, like the train.  The passengers being lost at each stop are comparable to middle-class Americans that are being negatively impacted by: 1) high gas & food prices, 2) declining housing prices, 3) still high unemployment numbers.  And the biggest problem is JOBS, JOBS, JOBS, or the lack thereof.  Jobs are so critical because they give Americans confidence that the economy is getting better when they see their neighbors getting up and going to work, coming home with bags of groceries, and investing in their homes.  So who is focusing on getting more Americans jobs? That's the question that needs to be asked of everyone from the president and his administration, to your senators, then your local congressmen, and also of the companies that are doing well.  Every moment should be spent on turning the dismal job scenario around and we've seen our politicians come up with some solutions but not nearly enough.  The formula is not that difficult as it usually comes down to stimulating Americans and stimulating the companies who are tasked with hiring more Americans.  Its a shame the debate in Washington is whittled down to spending versus tax cuts, but that has been the case.  Last time I checked both scenarios cost taxpayers money but are needed to bring this economy back to life.

Tax Cuts...Yes or No??

I am a market guy but I must write here in this article that I am surprised about how often every issue that the administration embarks on is severely attacked. The rule of thumb is you have reached a good level of compromise on Wall Street or in Washington when you pass a bill that has both sides of the debate a little unhappy. So my perspective of the Tax Cut debate is simple. We've officially reached the level where we have too many whiners and not enough leaders. Especially ones that will tell the truth. In my opinion, President Obama has done a decent job of navigating the water of a highly politicized atmosphere and prime example are the tax cuts.

This deal and its timing are both solid! First both people on the left and on the right are complaining, check. Second, unfortunately since you can't believe the moving lips of many in Washington listen to outside people. I'll listen to Mohamed El-Erian, CEO of Pimco, who has a great perspective on the markets. He points out that the market is headed in the right direction and even increases his overall outlook for next year, DUE to the actions of the White House. The tax cuts are extended for every for the next 2 years and while that may not be the smartest move for the deficit, the KEY element for also extending the cuts for the top 2% (which is what the Republicans want) was getting a series of main street and business tax cuts that STIMULATE the US economy going forward. Tag on the extension of unemployment benefits and this may truly be a multi -pronged jolt that our economy needs to beef up growth. Look at the reaction of the markets...they are responding well hope, now lets hope us folks on main street feel the shock. To be fair, he notes two main themes are the results of a higher outlook:

Fiscal Policy - This would be actions led by President Obama on tax cuts, which contain many parts that will stimulate our weak economy.

Monetary Policy - This would be the Fed's QE2 money printing policy which juices the markets.

This is a great move by President Obama to turn the political posturing into an economical bang for our economy.