The Debt Ceiling

There’s no doubt that the Federal government’s
deficit spending is a problem. Deficit spending is expected to run at
approximately 10% this year. And efforts by Congress to force budget cuts
by refusing to raise the government’s debt ceiling may prove effective in
cutting some spending.

It could also cause a big sell-off in Treasury
prices if the word “default” starts getting thrown around.

The simple fact is, we owe China a lot of money. Nearly $1
trillion. And if Congress decides to let the government shut down like it
did during the Clinton administration, we could potentially miss interest payments
to China and
other countries.

I’m sure it’s easy to say “screw
China.” And new
Congress leaders are fulfilling their election promises. Let’s hope this
budget standoff gets resolved before we get to the point where default is
on the table.

Some concrete plans to cut spending would probably
be a good idea. I’d start with the military effort in Afghanistan. Then, I’d offer a
major tax cut for American companies to bring their foreign cash home.
Finally, I’d cap pay raises for Federal employees, including
Congress.

In fact, how about Congress take a real leadership
role and vote themselves a pay cut to help make ends meet? That’s leading
by example.

Where would you start? What specific spending
would you cut? Let me hear your ideas for cutting spending and bringing
the deficit in line. Bonus points if your idea raises revenue or growth.
Send your ideas to: [email protected]

*****GDP
growth for the fourth quarter missed estimates by
.2%. Clearly, it would be great to see the economy grow fast enough to
actually add jobs. But the market will like growth that’s just strong
enough to keep interest rates where they are.

Please note that oil prices are bouncing higher
today. That tells us that today’s GDP number supports the notion
that growth is on track.

*****China‘s biggest computer maker
is Lenovo, purchased from IBM
(NYSE:IBM) a few years ago. Lenovo is
planning to take on Apple and its iPhone and iPad with offering of its
own. But get this: Lenovo is going with the names LePhone and
LePad.

I get the connection. But really, those are just
bad names.

This is a great example of why the
US remains the
center of innovation in the world.

*****Get All-Six Wyatt
Investment Research Premium Newsletters at 12% of the Regular
Cost!

Earlier this week I told
you that we were helping a small local farm in Vermont rebuild after a
fire destroyed their barn. To help out, Wyatt Investment Research has
donated a two-year subscription to every one of our six premium
investment newsletter services. This package of newsletter memberships is
valued at $4,644 and is up for auction. All proceeds will go to help
Pete’s Greens rebuild their barn and relaunch their small local food
business.

Right now, the current bid
is up to $550. While I thank those who have already bid on this item, I
want to give you an opportunity to get all of our premium newsletters at
an 88% discount to the normal price! Plus, by doing so, you’ll be helping
out in a time of need. The auction ends in just two days, so I encourage
you to place your final bids as soon as possible.
Please click here to visit the auction online and join in the
fun.