Saturday, January 01, 2011

And I promised I would be Nice!

I know not what to write on the foretelling of the new Year–Giddi-up Go on the Happy Best Wishes and all that. It is so complex that I almost feel I must separate into Good News and Bad News. The trouble comes that the Good News almost sounds like the reverse, and vice versa. Still, we might as well try this because nothing works anyway in our modern World.

Goods News:
1) The economy will not erode seriously in the next 12 months, but will basically stay the same. Like I said, the Same is not exactly a brilliant performance.
2) The US Dollar will solidify and increase in value. American Consumers will find that their Dollars will buy more. The downside to this is they will have a lot fewer Dollars to spend, and that the US Trade Deficit will become a major Topic once more.
3) The Medicare and Medicaid budgets will become an absolute disaster in this Year, so that Congress will have to adopt real medical reform, adopt higher real Taxes, or get hung from lamp posts; any one of those alternatives of real benefit, but with real antagonism being raised.
4) The power of the big Banks will finally be broken, because of their refusal to deliver the necessary Cash street-side, but it will kill any Stimulus designed by the brilliance of the new Congress.
5) Oil will again drop in Price, but only because fundamental economic functions will be constrained.

Now for the Bad News:
1) We are going to drop another 1.25 million from the Employment Rolls, though Consumers will get more conservative in Purchases with a reduction in Consumer debt.
2) Congress will find that the only way to raise sufficient funds for government operation is by higher Taxes on Business and higher Personal Incomes; the downside being that US Treasuries will take the slide once thought to be destined for the recovered Dollar.
3) Government action must be undertaken to create a new series of Minimum Wage jobs of major numbers in order to increase Employment Rolls and maintain a minimum level of Consumption; the upside may be that I may get my Military Reserve increase of 1 million more Reservists.
4) In the interest of getting a sound tax revenue base, Hedge Funds will be defined as Corporations by Congress, over the objections of many Wealthy individuals and mutual funds; the downside being that the Stock Market will show far less promise in the coming year.
5) A new medical law will pass stipulating that now medical businesses or medical suppliers may not increase their Price list, if they showed Gross Profits in excess of 10%. The new law will also stipulate that Doctors, Hospitals, and Clinics which made more than 10% of their initial Capitalization in the previous Year cannot raise their Fee and Price schedules in the following year. The law will be expanded to stipulate that CPAs, and lawyers, cannot bill any given Client more than $250,000 per year in labor billing; this does in no way limits the number of Clients or Income they may earn.

Like aforementioned, the whole does not make for pleasant reading. The way of the future is very rocky, and the Present will not go Gentle into the Good Night. lgl

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