NEW YORK ( TheStreet) -- On Friday, the Commerce Department is expected to report the deficit on international trade in goods and services was $46 billion in December, slightly lower than in November, owing to moderating oil prices and slower inventory build among U.S. wholesalers and retailers.Overall, the deficit is a significant tax on aggregate demand and jobs creation, just as a government deficit increases demand for U.S.-made products and boosts employment. In the coming months, higher oil prices and stronger inventory build should push up the trade deficit again and drag on economic recovery.
Those barriers frustrated the virtuous cycle of temporary tax cuts and additional government spending, new hiring, and additional household spending that the first-term Obama stimulus sought to beget. Now, the Fiscal Cliff deal will raise combined federal and state tax rates for many small businesses on expansion and reinvestment to maintain existing facilities to more than 50% -- even more in California and New York. Prior to the Fiscal Cliff tax increases, economists predicted growth of about 2% for 2013. However, these new taxes on small business investment and innovation strike at the heart of this once vibrant American jobs-creating machine. Look for growth in the range of 1.5% and a tougher jobs market at least through mid-year.