While many financial market participants are horrified by the approach of the fiscal cliff, money manager Whitney Tilson of T2 Partners thinks it’s a good thing.
That’s because it will force both Democrats and Republicans to compromise, he told CNBC. Republicans will have to give on higher taxes for the wealthy, and Democrats will have to give on entitlement reform.
“I’m actually pretty optimistic,” says Tilson, who was a fundraiser for President Barack Obama. “I love the fiscal cliff because I think it’s a forcing mechanism that’s going to cause both parties to touch their third rail.”
Editor's Note: Unthinkable Haunts Investors: Evidence for Imminent 90% Stock Market Drop.
Voters sent a message to the government last week, he says: “Stop playing politics and start working together to address the serious problems this country faces.”
Obama and House Speaker John Boehner have indicated they are willing to bend on their tax positions to reach an agreement.
In the past, Obama has insisted that the tax rate for families with income of more than $250,000 must increase, and Boehner has insisted that taxes can’t be raised at all.
Obama and congressional leaders of both parties will meet Friday to get things started.
“It’s going to be the real negotiating once they start talking in person,” Brendan Daly, a former aide to House Minority Leader Nancy Pelosi, tells Bloomberg. “Clearly, they heard the message of the voters that we need to work together and solve this.”
Editor's Note: Unthinkable Haunts Investors: Evidence for Imminent 90% Stock Market Drop.
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