Questions, Answers And A Proposal

- Socio-Political Commentary -

July 22, 2011 (FinancialWire) (By "The Political Prophet"(R)) -- Editor's note: Socio-political events and developments have a direct impact on the market. In the interest of providing shareholders and investors with a broad spectrum of information in regard to such potentially impactful occurrences, FinancialWire(tm) contributor, "The Political Prophet"(R), offers advanced insight with potential ramifications for virtually the entire market spectrum, perhaps best represented by bellwether-type ETFs such as the Health Care Select Sector SPDR ETF XLV, the Market Vectors Agribusiness ETF MOO, the SPDR Gold Trust GLD, the iPath Goldman Sachs Crude Oil ETF OIL, the iShares Dow Jones US Real Estate ETF IYR, the PowerShares Global Progressive Transportation Portfolio ETF PTRP, the Claymore U.S. Capital Markets Bond ETF UBD, the Technology Select Sector SPDR ETF XLK, the Industrial Select Sector SPDR ETF XLI and the PowerShares DB US Dollar Index Bullish Fund UUP, to name just a few. To that end, here's the latest entry from FinancialWire contributor, "The Political Prophet"(R):

The dark cloud we know as the debt ceiling increase is hanging over all Americans so it is appropriate to look at the fundamental questions, answers and analytics to better understand the issues. Since the outcome of these debates will impact every American including those not yet born, we hope that each of our readers will participate.

Question one is: "How did we get in this crisis mode and who is responsible?" The answer is: President Obama waited until his wild spending spree and failed jobs/ economy program created massive deficits and now our country needs to borrow over two trillion dollars more than currently authorized in order to prevent potential default for the first time in history.

We Predict: Historians will ultimately prove that Obama's timing was done for political reasons and that his refusal to do what was needed to create jobs was for the same reason.

He feared looking like he was doing something to support business owners while he was running for re-election.

Question two is: "Why can't Obama and the Republicans in Congress negotiate a settlement and who is at fault?" The answer is: Obama began the debate demanding an increase in his debt limit authority with no other attachments. Then he demanded tax increases to offset the spending cuts called for by the Republicans. Tax increases are counterproductive to job creation efforts so the Republicans have refused to give in to Obama.

We predict: If the GOP continues to lose the messaging battle, there will be a lot of pressure for House Leaders to capitulate and they may fold. If they allow revenue increases without offsetting rate reductions, Obama will win and they will lose.

For Congressional Republicans to regain control of the national dialog about the economy their message must be direct and reflect our real and acknowledged needs.

We Recommend: To resolve the crises Obama has created with reckless spending and failed job creation programs, GOP Leaders can propose a simple dollar for dollar immediate solution to preserve the "good faith and credit of the U.S. Up to a 2.4 trillion dollar increase in the debt ceiling and a 2.4 trillion dollar spending cut with no tax increase should be offered as the immediate compromise. A specific target for spending cuts from the 2012 budget should be included in the agreement as well as an agreement to complete a bi-partisan tax reform program prior to the 2012 elections as an element of the omnibus job creation effort which must begin immediately. The offer should be accompanied by a pointed explanation of the illogical and high risk nature of trying to do tax reform as a hurry up component of the debt ceiling legislation.

Based on Obama's actions (called pencil whipping in business negotiations), they should insist on written communications with this President from this point forward. I f Republicans need to give Obama something to "save face" they can offer changes in the tax depreciation rates for corporate jet owners. If he actually makes the change it will, of course, cost thousands of jobs but that doesn't appear to bother Obama.

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Resource note: Predictions prepared July 21, 2011; Of special Interest to political leaders, candidates, staff, donors, campaign professionals, journalists and investors; Original July 21 article posted by Investrend Syndications (at http://www.investrendsyndications.net/content/prophet/2011/07/21.php).

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