Mike Shedlock
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The word of the day is "stalemate".

Last year the Republicans had a chance to accept spending cuts to tax hikes at a 10-1 ratio. They declined. Now president Obama does not want to bargain. Who can blame Obama (except Republicans)? We may disagree, but that is part of the platform that got him elected.

The Republicans do not want to bargain either. And who can blame them (except Democrats)?

Regardless, Republicans blew a golden opportunity last year and that chance is gone. Obama has the upper hand now, and nothing will change that setup.

I certainly am opposed to tax hikes without something substantial in return.

Yet, if Obama holds his ground, the only way to have some cuts across the board right now is for the fiscal cliff to happen.

Could it be that the best political outcome may actually be the dreaded "fiscal cliff"? The fiscal cliff will hit military spending but why shouldn't it? The US could easily defend itself on half its current budget actually.

While pondering those questions and thoughts, please consider Obama Warns of Prolonged Talks as Republicans Rebuff Plan.

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Mike Shedlock

Mike Shedlock is a registered investment advisor representative for Sitka Pacific Capital Management.