Debt Ceiling Deal a Prelude to Ultimate Default
The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK (TheStreet) -- President Obama wants a big deficit reduction deal -- a long-term solution to the nation's unbalanced finances. Yet, what the president and Republicans propose -- even if both could accept much of what the other offers -- would only delay the inevitable. Like Greece, America's finances will grow worse and worse.
The U.S. is suffering from not enough growth. At 2%, GDP is advancing at the pace of worker productivity; hence, jobs creation is near zero, wages declining and tax revenues lag growth in government expenses. The big budget busters -- Medicare, Medicaid and Social Security -- will continue to far outpace GDP and tax revenue.
What comes out of budget negotiations could buy time through 2012, but make will make the growth problem worse, not better.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV