Depending on whose figures you credit, increasing marginal taxes on “the rich” — otherwise known as every schmuck “fortunate” enough to make more than $250,000… including you suckers who live in the Northeast U.S. and metropolitan California, where this amount will get you a second car and maybe a third bedroom — will raise anywhere from $75 to $90 billion dollars next year.
On the other hand, next year’s budget deficit, depending on how you cost Obamacare, could amount to anywhere from $1.3 to $1.6 TRILLION and higher. Despite their proposed tax increase delivering far less than 10% of that proposed deficit, the Administration now seems to have little interest in bartering said tax increase for an agreement to cut spending to a degree that might provide actual deficit relief. Of course many kind words have been uttered about a “future plan” to implement cuts, but Lord knows, we’ve seen such promises go up in smoke many times since the Reagan era, when that bait and switch was first used by the venerable Tip O’Neil.
So the question arises: Could the Republicans be dumb enough to trample their long held principles about raising taxes in a recessionary economy, and accept a blind tax increase without defined, commensurate, and indeed exponential, cuts in spending in exchange? Would they sell out their birthright and last bargaining chip merely to escape the glare of Ming the Merciless?
Well, I find it hard to believe, but I’ve seen some crazy stuff in the last month. So who knows? Maybe they will make it easy for all of us.
Perhaps in the end, the cynics are correct, and the only way out is to follow the wormhole to it’s very core, and burst out the other side at the dawn, once again. One thing is for certain, however… “Things fall apart… the center cannot hold.”
PS — you who come here for an occasional discussion of PM stocks…. I really think the sell off in AUY is as much an opportunity as the sell off in RGLD last week. One of my favorites. Also, I continue to like AG here.
Bless us all, every one.