By Tom Bradley

Am I bothered because the budget negotiations in Washington are dragging on and the market is bouncing around more than usual at year-end? No. Am I worried that tax increases and spending cuts will slow the U.S. economy? They will, but no, I'm not worried. Am I concerned that a lack of resolution will adversely impact the Canadian economy in 2013? Despite Mark Carney's warnings, not really.

What I'm scared about is that this isn't a fiscal cliff, it's a fiscal curb (as in street curb). The issues and numbers being hotly debated pale in comparison to what the President and Congress have to deal with in 2013. When they return to Washington in the New Year, they face the fact that the U.S. GOVERNMENT IS SPENDING OVER A TRILLION DOLLARS MORE THAN IT'S BRINGING IN … EVERY YEAR. Now that's a cliff.

I'm concerned about the fiscal curb, not because of its short-term impact, but because it gives me little comfort that Federal politicians are ready to deal with a desperate economic situation. Given the dithering that we're being subjected to now, it's hard to see how any meaningful progress will be made without a full-on crisis.

Any post-election optimism I had about the two parties knuckling down and dealing with the issues has been totally washed away. On the contrary, the political risk in the capital markets has gone up over the last two months, no matter what happens over the next few days.