Good Morning, Readers,
It is the 20th of February today, precisely eight days to the end of the month, a very important date when the world's eyes will once again be reading the U.S. Debt Clock, and trying to understand what is going on.
Being an optimist and a realist, I would opine that Mr. Obama will exercise his Presidential Prerogative and write in One Trillion Dollars into the system. As he indicated at the end of December when he had to abruptly cut his holiday in Hawai short and go back to the deserted corridors of power in cold Washington to get things done re the Fiscal Cliff, he will not be debating this issue. Now, President Obama has to select his writing instrument, and create into being a further Stimulus, which is both prudent and necessary, to rectify the question of the Debt Ceiling.
Since 3rd August 2011, when $2.15 Trillion was written into the fiscal books, the U.S. economy has turned into the robust Recovery it has today become, with improving picture of month-on-month job creation, house purchases and a relocation of jobs in America and a regeneration of the manufacturing and services sector. At last count, there was a surplus of over a Trillion Dollars in the corporate coffers, for example $127 Billion with Apple alone, so the prospects of further job and wealth creation remains on course on the private sector, but for the public sector, additional activity will do good, especialy the shovel-ready jobs, and this new raising of the Debt Ceiling can only benefit the economy. In due time, wealth will be created to such an extent that loans will be repaid and the fiscal books will be balanced.
(Well, fiscal books of sovereign nations are seldom fully balanced, as all activities are going forwards, sustaining life and creating heatmaps of happiness).
As the Bank of Japan continues with their Stimulus, running at about $68 Billion Dollars a month, and other economies are introducing stimulus measures through cutting interest rates, it will be in sync with the major economies for the U.S. to go ahead with this measure.
When Mr Obama cut short his Christmas holiday, you could sense the sense of duty the President has to the American citizens, and indeed to the world at large in the broader context of a worldwide economic Recovery. In that sense I believe he will do his duty, and sign in the Stimulus with the exercise of the Presidential Prerogative.