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As I watched last night's episode of the Jon Stewart show, I kept nodding my head in agreement as he showed the same people saying that $250,000 was not a lot of money were now on the other side saying teachers in Wisconsin making $51,000 a year were getting paid too much. The same people who were complaining because the government wanted to cap the pay of CEOs of companies we bailed out, saying" a contract is a contract" and " it would hinder recruitment" are saying the opposite now that the collective bargaining contract is in question. It all depends on what side of the fence you are on. I included the show in this blog because I couldn't begin to give it the justice it deserves.

I'm sure everyone agrees that the government has been spending too much over the last decades and entitlements,defense spending and tax reform need a bipartisan solution. I think since Social Security does not add to the deficit, so it could be solved in a matter of days to make it solvent for the next 75 years. The tea party led House of Representatives submitted a budget of $61 billion spending cuts over the next seven months. That opening bid never had a chance because Goldman Sachs said it would reduce economic growth as much as 2% from April to September of this year, Moody Analytics said it would cost us to lose about 700,000 jobs by the end of 2012 and recently, fed chairman Bernanke said the GOP plan would lead to a loss of 200,000 jobs. That's economics' for you; about all you can get from the analysis is that the cuts need to be the lower.

This morning's job report came in a lot better than expected with 192,000 jobs added; dropping unemployment to 8.9%. Last month numbers were revised by 58,000, so 260,000 private sector jobs is not so shabby. This corresponds to factory orders up by 3.1 % in January. The next question from the supply- siders (who won't acknowledge the good news) when will the Fed stop QE2, since we see a worldwide rise in food prices, meaning inflation is on the way. The fed chairman admitted that we will have a little inflation but nothing to worry about since it's a supply driven inflation.

I may be overly optimistic, but I don't think we need to panic because the Federal Reserve is predicting that the GDP will rise as much as 3.9% in 2011. That's the other side of the calculator I keep talking about. The current CBO predictions are set for a 2.8% growth over the next decade. If the GDP grows about 1.1% over the predicted 2.8 %, the annual deficit will nearly disappear. We'll only have to go back to 1991 where the CBO estimated the economy would grow at 2.6% instead it grew at 3.7%.... That's why I think we need spending cuts, tax reform, investment and infrastructure spending, and tax increases for education and job training to go with a 10 year program to reform Medicaid, Medicare, and defense spending.

John Stewart Show http://tinyurl.com/4zbybw7