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.

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