A balanced federal budget by 2016 is quite conceivable, thanks to the inability of a lame duck President Obama to achieve any major part of his activist liberal agenda, Potomac Research Group's Greg Valliere told RIAs attending this year's Schwab Impact conference in Washington, D.C. on November 10. Valliere believes that gridlock in the nation's capital will quash any serious new government spending initiatives between now and the next presidential election cycle.
All that could change if the Democrats regain control of the House of Representatives, which would require them to only take over another 17 seats. But given the complexion of House districts, or "gerrymandering" as Valliere called it, that is very unlikely, particularly in light of the disastrous roll-out of the new health care plan.
"Health care is an albatross for the Democrats," Valliere noted. Democrats in swing election districts are racing to distance themselves from the plan.
Moreover, GOP leaders are openly saying they won't permit another government shutdown or debt ceiling crisis. Republicans indicate "it's the last thing they want," said Valliere, adding they would rather sit back and watch Democrats squirm as the health care stumbles out of the gate.
However, total repeal of Obamacare is unlikely unless Republicans gain control of the White House, Senate and House in 2016.
In the meantime, there are other positive developments emerging from Washington. The most dovish Federal Reserve Board in history is likely to remain in place after Janet Yellen is confirmed to succeed Ben Bernanke as chairman. Even the hawks on the Fed are turning into doves, Valliere said.
Last year, the federal budget deficit fell by $400 billion. Next year it could fall to 3 percent or less of GDP, and Valliere predicted it could even tumble to less than 2 percent of total GDP by 2015. That creates the possibility of a surplus by 2016.
Valliere: Obama's Impotence Is Cause For Optimism, Balanced Budget
November 11, 2013
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Comments
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I think we have just established that the rich get richer and the poor get poorer under Democratic presidents, something with which I do not necessarily agree. The problem is, the current market run is being driven by Fed policy because because that's where the QE money seems to be finding a home due to lack of alternatives. We should also keep in mind the fact of history that today's Democrats are not your father's Democrats, and today's Republicans anre not your father's Republicans. From what I see in history, Richard Nixon was more of a Keynsian and in many ways more of a progressive that was Bill Clinton. Clinton, afterall, never tried to freeze prices and wages.
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Lets see which party is responsible for our national debt - http://tinyurl.com/3rdeaac Lets see under which party the economy does better under -Â http://tinyurl.com/3q87g9
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If we are playing the correlation equals causation game, I would submit that the common thread in a balanced budget is a Republican House of Representatives plus a Democrat president. In fact, that seem to be one of Valliere's points.
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Dt, you so have that one right! LOL
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So the last time we had a budget surplus was under Clinton, and now this article predicts another one under Obama---and we are supposed to vote for the Republicans because of fiscal responsibility? That myth died a long time ago.