After the fiscal cliff

Updated: Saturday, August 3 2013, 12:38 AM EDT
After the fiscal cliff  story image
(NEWSCHANNEL 3) – Thursday is the last day of the 112th Congress; unpopular, unproductive and sometimes seemingly unhinged.

It did manage to avoid the so-called fiscal cliff with a lot of backroom brinksmanship over the past several days, but in this installment of Tom’s Corner, Tom Van Howe says he is not impressed.

Look, ever since this Congress fell apart a year-and-a-half ago over the debt ceiling they knew this fiscal cliff issue was coming. These are the people we the people hired to represent us in conducting our nation’s business, but they turned out to be, for the most part, much more petulant than practical.

This country has been spending more than it takes in for a long time. Who votes to spend that much money? Congress. Who gave the president authority to start two wars and borrow money to pay for them? Congress. Who goes around acting like debts coming due are a surprise? Congress. Who wants to avoid acting grown up and owning up to the fiscal problems we face? Congress.

What was it President Barack Obama signed into law on Wednesday by autopen after resuming his vacation in Hawaii? It raises taxes by four-and-a-half percent on those individuals who make more than $400,000 a year and on couples who make more than $450,000 a year. That, my friends, will raise roughly $600 billion dollars in revenues over the next ten years. That’s it? Are you kidding me?

The national debt is $16 trillion and growing. That new $600 billion will pay roughly one-quarter of the interest on that debt over the next ten years. That’s all. 25 percent.

It would be one thing if that was just for starters, but it’s not. Nobody wants to tackle entitlements because they’re the mines in the battlefield and to step on one could mean voters will no longer like you. It’s a kind of cowardice.

I’m not sure anyone even knows how to attack defense spending, but we could start by not spending money on weapons the armed forces say they don’t need.

Everyone is hoping that federal revenues will go up dramatically as the economy improves in the years ahead, but there’s no guarantee of that, not by a long shot. The truth is we’re in serious financial trouble and we’re in this together and if it means a change in our Medicaid or Medicare or our Social Security checks, we’ve got to bite the bullet.

It is not acceptable to give these bills to our children and grandchildren, nor is it acceptable to think we can find the state on the backs of the fewer than half-million people, out of a population of 310 million people, who make more than $400,000 a year.

Somebody in Washington has got to have the courage to say that we’re sinking and that we really do need a bigger boat.

In this corner, I’m Tom Van Howe. After the fiscal cliff
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The Labor Department says that the four-week average of applications, a less volatile measure, fell 4,750 to 312,000. That is the lowest four-week average since October 2007, just two months before the Great Recession started. The average has fallen by 53,500 applications over the past 12 months.

Applications are a proxy for layoffs. The current level of claims suggests that employers are holding on their workers with the expectation of stronger economic growth ahead.

Employers added 192,000 jobs in March and 197,000 in February, the Labor Department reported. Hiring has picked up after a slowdown caused by severe winter weather.

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Mortgage buyer Freddie Mac says the average rate for the 30-year loan fell to 4.27 percent from 4.34 percent last week. The average for the 15-year mortgage eased to 3.33 percent from 3.38 percent.

Mortgage rates have risen about a full percentage point since hitting record lows about a year ago.

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The earnings were equivalent to $4.02 a share. Analysts polled by FactSet had predicted earnings of $3.49 a share.

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Goldman's stock rose $2.78, or 1.8 percent, to $160 in pre-market trading.

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