- Published on Wednesday, 27 June 2012 09:00
- Written by Adam English, Associate Editor, Inside Investing Daily
- Hits: 465
For the first time, I find myself hoping the U.S. government will do what it seems to do best -- absolutely nothing.
News stories are popping up that speculate Congress will delay the "fiscal cliff" until March 2013. The traditional "anonymous congressional aide" controlled leak is cited.
While it would be better if this were resolved nearly a year ago, there is a lot to lose if the automatic cuts go through as scheduled.
The only reason why it would truly help is the timing of the deadline. January 2013 is entirely unrealistic for any useful legislation.
A number of incumbents are undoubtedly going to be kicked to the curb if Congress' approval rating influences voting activity. We are going to have a lame-duck Senate, Congress and maybe even a lame-duck president as the deadline approaches.
Considering a vast majority of Americans view the economy the most important problem in the nation, the general election will reflect how we collectively want to go forward. It will also become a mandate for the prevailing party.
To be clear, the U.S. government will have to do something in order to do nothing. Bills will have to pass to extend the deadline and provide temporary government funding.
Politicians would pontificate in front of cameras and delay action, but in the end it would pass.
The only other options are to let the economy slip into recession or actually do some hard work. I think plenty of politicians will quietly take the easier path.
As we saw last summer, the markets and economy will suffer if nothing happens until the last second. But if nothing happens at all our situation will be far worse.
Giving politicians more time to do nothing is not ideal, but it is the best option available.