Get out of bed and rub your eyes. Pinch yourself. Call the broker. Start making bets on Wall Street again.
Why? House Speaker John Boehner, R-Ohio, has proposed raising the tax rate on millionaires, setting his sights on raising $1 trillion over 10 years, which tops a previous revenue plan for raising $800 billion. Alongside the revenue, Boehner proposes $1 trillion in spending cuts.
The chances of any final deal being struck looking like this one are virtually nil, but it is still a watershed concept to have Boehner sign up for raising taxes on the wealthy.
The White House, true to form, quickly rejected the bulk of the proposal, which was reported by the Wall Street Journal as a private offer, which may mean it was written on a napkin and slid across the negotiating table.
Related
However it was meant, a Democratic aide called it a "breakthrough," and a Republican aide said it was a valuable template for the final agreement.
According to economists, however, the deal will not look like that at all. A National Association for Business Economics survey found 90 percent of respondents indicated they believed budget cuts will be put off -- the can will be kicked down the road. Similarly, 90 percent indicated they do not believe lawmakers will raise taxes across-the-board.
Taking that a step further, however, the survey that included 48 economists ended with a prediction of economic growth for 2013 of 2.1 percent, just slightly below what was predicted for 2012, the Journal reported.
The street-level translation there is that a vast majority of economists predict not much will change and the impact of that on the economy will be very little.
A second glance at the figures shows a bit more optimism, as economists in the survey indicated the gross domestic product would grow 1.8 percent in the first quarter of 2013 and that the rate would pick up to 3 percent in the fourth quarter.
That means that 2013 will still be a year in limbo for the vast majority of those who are looking for work. The GDP is growing at a pace of about 2.5 percent currently and the number of new jobs each month remains paltry.
In international markets Monday, the Nikkei 225 index in Japan rose 0.94 percent, while the Shanghai composite index in China gained 0.45 percent. The Hang Seng index in Hong Kong slid 0.41 percent, while the Sensex in India gave up 0.38 percent.
The S&P/ASX 200 in Australia dropped 0.21 percent.
In midday trading in Europe, the FTSE 100 index in Britain was off 0.36 percent, while the DAX 30 in Germany was flat, rising 0.02 percent. The CAC 40 in France shed 0.18 percent, while the Stoxx Europe 600 lost 0.19 percent.
