Our stock market has gone nowhere since Thanksgiving week but it would be a mistake to believe that all markets have been on hold since that time. You just may be missing an opportunity elsewhere while politicians fiddle here at home.

While politicians bicker over the "Fiscal Cliff," the government continues to borrow about $4 billion a day. The statutory ceiling on U.S. Treasury borrowing is $16.4 trillion and we will hit that number by year-end. Then what?

If Congress refuses to raise the borrowing limit, we can expect the government to run out of options to avoid a default sometime by the end of February 2013. If we default, even technically, the credit agencies are ready to downgrade our debt once again. You may remember the drama and hysterics that last year's debt limit crisis invoked.

For months, pundits predicted dire consequences if the rating of our sovereign debt was downgraded by the big three credit agencies. Foreign holders of our debt would abandon us, they said. Interest rates on all sorts of debt would skyrocket. There would be a stock and bond market crash. Standard and Poor's did actually cut our debt rating from AAA to AA-plus. Contrary to the predictions of these Cassandras, bond prices actually went higher and rates lower; so much for the vaunted power of our credit agencies.  

Readers may recall why that downgrade happened. Last year was the first time in history in which Congress turned what had been a pro forma vote to raise the debt ceiling into a hostage-taking crisis. In exchange for their approval, congressional Republicans demanded huge spending cuts. One can fault the president for going along with that game, instead of simply raising the debt ceiling on his own and dealing with the consequences.

But President Obama has made it clear that last year was a one-time event. He is insisting, as part of the Fiscal Cliff negotiations, that Congress relinquish its control over the debt ceiling. He is right, in my opinion. Using the nation's borrowing ability for political gain is unacceptable.

The 2011 debt ceiling farce also marked a turning point in a number of areas. It was the seminal event that reversed this country's priority from job creation and economic growth to austerity. It also resulted in the down grading of our nation's debt by a credit agency. It is also worth noting that S&P's downgrade decision was politically motivated.

The credit agency, in its explanation for its negative rating change, explained that based on the 2011 debt negotiations, that the U.S. government's ability to manage fiscal policy was "less stable, less effective, and less predictable."

In one of those paradoxes of history, going over the fiscal cliff would actually avert any further downgrade to our debt status. The expiring Bush tax cuts and automatic spending cuts across the board would do quite a bit to alleviate the stated default-related concerns of the credit rating agencies. The tax cuts would generate around $4 trillion in new revenues over the next decade. That is almost the exact amount most credit agencies are looking for in deficit reduction in order for our fiscal house to be out of danger.

Of course, going over the cliff and staying there will present the nation with another set of economic problems. Both sides agree that the combination of tax increases and spending cuts of that magnitude will both raise unemployment and slow the growth of the economy. It could actually tip us back into recession. One would think the risk of default for any nation would climb as a result.

Back in September, Egan-Jones, a smaller credit rating agency, downgraded American debt from AA to AA-minus, citing Federal Reserve plans to stimulate the economy (QEIII). They argued the plan would reduce the value of the dollar, do little to stimulate the economy and artificially raise the price of oil and other commodities. That would, in turn, hurt U.S. businesses and the consumer. They indicated that the risk of inflation, rather than the risk of default, was the justification for its downgrade.

In which case, if we do fail to come to a compromise, fall off the cliff and, as a result, experience a decline in economic growth and inflation, will the credit agencies actually revise their ratings upward? It would appear they would have to since the basis of their downgrades was politics and lack of fiscal austerity (S&P's reason) and inflation (Egan-Jones' argument). We will have to wait and see how this same group that missed the entire subprime debacle handles this one.

It was a week of tension. Markets rose and fell on every word uttered by party leaders, who jockeyed for position and the national spotlight around the Fiscal Cliff. It was Washington at its worst. Get used to it because this deal is going to go down to the wire.

Remember last year's Greek debt negotiations? It was a game of he said, she said that dragged on for months. We are playing the same song once again only on this side of the pond. I guess the best that can be said for this American version is that if nothing happens before Jan. 1 we all think we know the outcome.

But unlike Greece, where the country either received a bail-out or went bankrupt, this U.S. event would not be as dramatic, at least at first. If for some reason the politicians miss the deadline, it would take several days and even weeks before we feel the tax bite. As for the spending cuts, those draconian measures will be enacted piecemeal and over several years. Why is this important?

Well, the stock markets are acting like January first is a do or die event. It's not. Politicians can continue to agree to disagree; delay a compromise and either extend the deadline or let the country fall off the cliff (really a ditch) temporarily. They would still have time to come up with a solution sometime in 2013 without much impact to the economy.

But that kind of scenario would sell fewer newspapers and reduce the ratings on business shows. Brokers would have less to talk about and retirees, rather than being pinned to their televisions, could actually go out and do something productive like exercise or read a good book.

If you are in that stressed-out category, remember this. How much did all that angst over Greece help you? In the end, Greece did get a bail-out, their market is up 25 percent since then and the U.S. market is up substantially as well. So relax, will you?

Warren Buffet may not be right about everything but one reason I believe he is so successful and still in the business is because he takes a long-term view. Sure, time has become compressed. Fortunes have been made and lost in years rather than decades and it has become fashionable to “trade” the markets. I am as guilty as the next person, but only to a point.

In the past, we've had to refuse clients because we didn't see eye to eye when it came to investment style. They insisted we sell every down move in the market before it occurred and jump back in "at the right time," which for them, was before the markets moved back up.

"If I could do that," I explained. "I wouldn’t need to work. I could simply sit home, trade my own account and make a couple billion dollars a year."

Here's my take. The anxiety over this Fiscal Cliff is overblown. Focus instead on the increasingly positive economic data in the United States. In addition, I expect the Fed may announce further stimulus moves in the coming month. The stock market, which is trading around 13 times earnings, is fairly valued given a modest growth scenario. We may be underestimating that growth and prospects for a better 2013 than most people expect. Buy the dips.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

The Fiscal Cliff commands center stage. The nation's news media is dutifully reporting every syllable uttered by anyone even remotely connected to the negotiations. But what really matters is what is said behind closed doors between Washington's lobbyists and our elected officials.

Now that the elections are over, the debate (and agreement) among voters and parties that taxes should be raised and spending cuts must necessarily come down to the details. Those details and the devils that represent them (called special interest groups) are assaulting congressional offices with convincing arguments on why their constituencies should be excluded from either tax increases or spending cuts.

It is an old story. Theoretically, in America, I may agree that we should all suffer for the greater good of the country and the economy, as long as in reality "all" doesn't include me. In Washington, that concept prevails everywhere. A corporate coalition, for example, is lobbying to kill any tax increases in the dividend rate. That rate, currently at 15 percent, could go as high as 35 percent or more. They argue that raising the dividend tax will hurt seniors who depend on dividends as part of their retirement savings.

Of course, they neglect to add that the vast majority of Americans (low-and middle class investors) who own dividend stocks, own them in their retirement accounts, which are excluded from dividend taxes. I suspect that raising taxes on dividends will predominantly impact the 1 percent of America's most wealthy, but that's not part of their argument.

Readers, by now, are fully aware that the sticking point between Republicans and Democrats, as far as extending the Bush tax cuts, centers upon those earning $250,000 or more annually. The Democrats do not want to extend the Bush-era tax cuts to that group, while Republicans do. Instead, the GOP would like to focus on eliminating certain individual tax loopholes, arguing that they would be less harmful to businesses, jobs and the economy.

One loophole being discussed is the tax deductibility of home mortgages for either first or second home owners or both. There is some talk about capping that deduction, although to do so would impact many middle-class Americans as well as the wealthy, argues the homebuilding industry. Their lobby won't tolerate even a minor change in the mortgage interest deduction.

They contend that home ownership has taken the brunt of the decline in the nation's economy and is now only beginning to recover. Monkeying with mortgage deductions would throw housing back into a tailspin and with it the majority of homeowners in this country, according to housing advocates.

AARP, the top lobbyist for retirees, is also dead set against any spending cuts to Medicare and Social Security. Even minor changes such as slowing the cost-of-living formula for Social Security recipients or extending the age of Medicare eligibility is anathema to their constituency, retirees.

Wherever you look, from charitable contributions to energy depletion allowances, some group or another has a reason, sometimes rational, sometimes not, for why the axe should be spared in their case. It appears that where individual interests are concerned, posterity is taking a backseat among America's lobbyists and the populations and professions they represent. I suspect that if we expect our elected officials to compromise and avoid the Fiscal Cliff; Americans should first look at their own attitude toward compromise where our individual interests are concerned.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

And you tell me Over and over and over again, my friend Ah, you don't believe We're on the eve of destruction. — Barry Mcquire, "Eve of Destruction"