The Prudent Retiree - October 5, 2021
Everett Dirksen was a U.S. Senator from Illinois who served in the 1950s and 60s. He was known as a colorful orator and was a champion of Civil Rights legislation in the 1960s. He also had a penchant for changing his mind on policy positions. He is reputed to have made this statement during budget negotiations in the 1950s.
Today, it’s a trillion here and a trillion there when it comes to government debt and spending. President Biden has proposed a $3.5 trillion spending program on top of the bipartisan $1.5 trillion infrastructure bill. That is real money. Congress also needs to pass an increase in the debt ceiling or Treasury Secretary Yellen warns we will default. Chaos would ensue.
It would be nice if there was consensus, but not even close. We have the usual Democrats and Republics blaming each other for the coming disaster. Each side is heartless with evil intent. There is also a new dynamic. Democrats are at war with one another. Progressives and moderates are slugging it out over the size and specifics of the spending. Neither bill, currently, has the votes to pass.
My mother taught me that you catch more flies with honey than vinegar, but the politicians and activists haven’t learned that. The President has blasted those who disagree with all sorts of invective. Progressive activists stalked, harassed and videoed Senator Kyrsten Sinema, a Democrat, in a bathroom stall for questioning the President’s immigration and spending bills. Bullying seems to rule the day. Perhaps try listening to my mom.
The markets remain volatile. We are down around 5% from the all time high. Metrics remain positive, but Prudent Retiree does share Senator Dirksen’s concerns. If the massive spending bill and largest tax increase of all time are enacted, history tells us that will be a problem for the market. The President tells us not to worry—it won’t cost anything. Really? Right now, maintain current equity allocations. We are closely monitoring the battle in D.C. and will make appropriate changes. Let’s hope the trillions here and trillions there stay in the economy and don’t get sucked up in the government maw.
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