#WhiteHouse & #Congress beg the question: Do we still need a federal #budget?

Yesterday the Republican-controlled House of Representatives passed a continuing resolution, H.J. Resolution 59, to keep the federal government up and running with a catch: Congress would have to de-fund the Affordable Care Act also known as Obama Care.

The GOP has tried forty times to repeal the Act.  Bringing the federal government to the brink of shut down in order to dismantle President Barack Obama’s crowning achievement appears not too big a price to pay for striking down the law.  This assumes that the Congress is the only stakeholder in this political action.  Having produced no budget in five years, the investment banking community has raised the question how serious is Washington about projecting to global markets that the American economic and financial system is stable enough for investment.  The Board of Governors of the Federal Reserve System compounded this concern in its recent Federal Open Market Committee statement where, among other factors for slow economic growth, the Board pointed out that “fiscal policy is restraining economic growth.”

The FCC did not elaborate in its statement. on how fiscal policy was restraining growth or the specific fiscal policy for that matter, but the observation of gridlock over budget matters could not be far from the epicenter.

If signaling America’s policy priorities is a reason for having a budget, then Americans must either be satisfied with the course we have been steering for five years or are very okay with the ship of state having no rudder as long as pet projects are funded.  Fiscally, America may be desensitized but politically agitated with Congress and the White House’s inability to pass a budget.

The investment community is okay in the short run with the monetary policy produced by the Federal Reserve.  Low interest rates provide the meth the bankers and traders on the Street enjoy ingesting.  This takes the edge off the threat on a healthy economy that budget deficits bring.  Although Friday’s close was mostly flat, the market reaction to the Fed’s announcement that it would keep squeezing $85 billion a month of the juice into the punch bowl meant cheap money would rule for another month or so.

Unless you are wed to the academic rhetoric of budgets and priorities, the individual looking to acquire and grow her capital in the United States doesn’t need Congress to produce a budge as we have come to know it.  As long as our institutions for making laws and resolving disputes are in place, the investor and her investment community are prepared to the rest it seems.

About Alton Drew

Alton Drew brings a straight forward and insightful brand of political market intelligence. Alton Drew graduated from the Florida State University with a Bachelor of Science in economics and political science (1984); a Master of Public Administration (1993); and a Juris Doctor (1999). You can also follow Alton Drew on Twitter @altondrew.
This entry was posted in Budget, capital, Congress, debt, deficit, Economy, employment, House, John Boehner, Obama, ObamaCare, Political Economy and tagged , , , , , , , . Bookmark the permalink.

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