Chicago may not kick can

 They want to finance their old debt while taking on a bunch of new. They suffer a tight money market, they likely will suffer a down grade in the process.

And more widely, finance is underestimating the risk  f a crazed tax dodging scramble after the election gets new taxes. We may see more cities trip in Q1 until that gets sorted. Then we get the bailout negotiations and a three year reconstruction period for California.

Who is going to the meeting of the elders? The meeting is about how to do a better Nixon. Remember the main components, a new Fed contract, a devaluation contract, and a rebalance by revenue sharing.  Do not forget the overlap market on entitlements.We need brains from the governor's in that meeting.

We are reaching capacity n some covid wards so  more liquidity heads up the covid value chain..  None that really taxable yet.  So government stranded everywhere at once. The only easy investment fr government is covid supplies and research. Not of that posits a faircoin toss until Q2 to Q3. 

That is almost a year and a half of sudden stop in municipal budgets.   This triggers an unexpected wave of early retirement. And that compounds the pension systems. But all of these have no market until we bet the devaluation, as we need regulated banking to estimate other adjustments. We cannot restore regulated banking until Treasury get a double spending contract. And that means getting the governors together.

But we are under threat of a tax dodge scramble, and we would like to know the devaluation deal before beginning tax adjustments.  The best guess on that s a Half Nixon, likely a 2%/yr direct inflation. This will e the likely norm on renewal, a direct, and effective value added tax uniformly applied. Monetary neutrality requiring a corresponding  productivity growth.   That growth comes from regulated banking regaining market share and velocity  rises causing the inflation tax to be shared across deeper value chains at a quarter point, about equal to a fair monopoly tax.  

So the tax is fairly shared, and central banking money accurate to the renewal of contract years hence. That means we can reprice pensions without fake inflation adjustments. We have fair pricing on past defense budget losses.  Young kids get a fair pricing on future wages. And we can fair price revenue sharing.  The Senate and House free to change the revenue ratio and amount, up to the inflation tax boundary.  

The cost of covid comes down to early retirement. And that starts before everything else, like now. But future retirement payments may of by as much as 10%. At this point all pensions will be  subject to some renegotiation. Within the unions there are differences when jobs are cut.

The stock market settles as regulated banking regains share.  Companies ready for a universal 2% flat tax on inputs and outputs. chains.  

That tax rises and falls with the fortunes of small vs large states mostly.   On net it stays fairly even and thus favors small states. So large states on the ascent want the inflation tax dropped to lower bounds, and visa versa.  For example the large states dominant in one party and we get Obamacare. The house is pushing Obamacare, the small states scared out of their wits.  Large states  want lower inflation tax, this is a new price sensitive program. Small states want scale compensation, they do not bi mammoth hospitals.  On the margin the two parties forced into stability, keep the inflation tax at 2% and make very slight modifications to the split ratio to compensate scale. And that means watch the roll out of Obamacare with better precision by both chambers. Forces them into the side effect business before another set of boneheads arrive.