ETF News Update: The State of the Union (UUP, USD, TLT, USO, DBC)

As I write this ETF News Update, the State of the Union address is scheduled to begin in less than two hours. 

Since it hasn't happened yet and you will likely be reading this after the speech is over, I'm going to tell you about what we heard, what we should have heard and what we need to hear going forward. 

President Obama will deliver the State of the Union address to a joint session of Congress which complies with instructions given in Article II, Section 2 of the United States Constitution, which instructs the President:

“He shall from time to time give to Congress information of the State of the Union and recommend to their Consideration such measures as he shall judge necessary and expedient.”  Article II, Section 2, United States Constitution Wikipedia

Tonight, President Obama will begin his speech with some version of “the State of the Union is strong,” or the “State of the Union is sound.”  In the audience, we'll see members of Congress who traditionally sit on opposite sides of the aisle by party lines, tonight sitting together, Republican, Democrat and Independent, in a well deserved and important gesture of unity and respect for Congresswoman Gabrielle Giffords who thankfully continues to recover from a recent assassination attempt in Tucson, Arizona.

Mr. Obama will outline his plans going forward and there will be standing ovations and then we'll hear the Republican response from Representative Paul Ryan, the new Chairman of the House Budget Committee.  There will be lots of talk about the “need to work together,” about employment and budget cutting and Congressional reforms.

 It will make for excellent political theatre, but unfortunately, the entire evening will likely be a charade and a piece of fiction.

Because the Sate of the Union is not good.  It's terrible, (insert your own choice of words here) getting worse, and while not too late to be fixed, is in dire need of emergency medical care. 

We all have our own lists of things that are wrong but here are a few of mine along with a couple of ideas for righting them.

1. America is broke and we are selling debt (TLT) in the form of U.S. Treasuries, to finance a national debt that this year will for the first time equal or surpass GDP.
2. America doesn't have enough jobs.
3. Current monetary policy is trashing the U.S. Dollar (UUP) and causing commodity prices (DBC) and energy prices (USO) to soar.
4. The country is heading for a train wreck with programs like Medicare and Social Security as the enormous baby boom generation army that's 76 million strong starts to retire this month to the tune of 10,000 or more per day.

 I could go on and on here but you get the picture.

But all is not lost.  There is time to fix things and return America to its previous greatness and vitality but it won't be easy and it won't be quick, not the quick and easy way we like things to be in America. 

Here are a couple of quick solutions: 

1. To get out of our fiscal crunch, we need to be like a family that has maxed out its credit cards on cars they couldn't afford and house payments they couldn't sustain.  That family has to boost its income so Dad does some moonlighting and Mom goes back to work (if they can find jobs) and they cut expenses by driving the family car until it dies, eating out less and taking fewer vacations.

On the national level this means cutting spending, which everyone knows we have to do but nobody wants to step up and do, and it means raising income, which guess what, means higher taxes.  As the old sayings go, “there's no free lunch” and “you've got to pay to play.”

2.  America doesn't have enough jobs because we've shipped them all overseas or they've been automated or eliminated.  Some jobs will never come back but it's important to bring American jobs back home and to give Apple (AAPL) incentive to make its phones in Seattle, not Shenzhen, and Nike to manufacture its shoes in Southeast Hillsboro instead of South East Asia.

Bottom line, we need to stop building China's middle class at the expense of the American Middle Class.

3. Monetary policy needs to be reconsidered and retooled so that the U.S. Dollar (USD) regains its former respect and so that America can reverse its slide from being the world's largest creditor nation to the world's largest debtor nation.

So what really needs to be done?

Congress and the President can and should have their love fest on national television, but when the TelePrompTers have been turned off and the talking heads have headed off to Washington's great restaurants, our political leaders should stay after and have a very serious heart to heart about where we are and where we need to go.

Instead of being political hacks working for the political PACs, they need to stand up and be real leaders.  Instead of kicking the can down the road for our children and their children to deal with our ever mushrooming problems, these people need to sit down and do the tough work that we expect them to do.

If and when that happens, then indeed, the State of the Union will be good.

Disclosure: Wall Street Sector Selector actively trades a wide range of exchange traded funds and positions can change at any time.