Hi. Nice rant. I like rants, as long as they're intelligible, which this one was. May I make a couple of points?
Yet the Fed in its omnipotent wisdom decided to push the envelope for another 50 basis points. Which leaves me with a nagging question – WHY?
I agree with you that the Fed missed. I won't argue with that. And that the consequences are pretty nasty. But I'm a bit more willing to cut them some slack because I, like the Fed, fear inflation more than I fear what's going on now. I was an investor in the days of stagflation. More precisely, I stopped investing altogether for more than a decade because it was all just too depressing and pointless. Rather than investing, regular people were buying as much as their credit cards could handle so they could pay for their stuff later with cheaper dollars. That mentality became ingrained. Breaking that trend took forever. What's going on now won't take forever to break. We don't hear people talking about a permanent downward trend. Instead, they're looking for the bottom so they can catch a ride on the next uptrend. So while I'm not at all happy with the condition of my portfolio, and I wish the Fed had gotten it right, I prefer to see the glass as half full. Well, maybe one quarter full. Would you believe 20% full?
It gets into bigger issues such as privatization of Social Security...those fat bastards in Washington can blow smoke up our ass to keep us funding an outdated POS plan.
The big difficulty in getting away from "an outdated POS plan" is always the transition. I recall a couple of years ago when they were pushing the elimination of the income tax in favor of a sales tax, the proponents were asked about how they'd transition, particularly when you had people who had been paying income taxes all their lives, were now about to retire, and would have to pay taxes all over again on that money as they spent it to support themselves. The answer was that the proponents thought people should be willing to take the hit for the benefit of their grandchildren. Yeah, right.
Regarding Social Security and privatization, I've never heard any of the proponents say whether this plan to redirect some SSI tax dollars into private accounts was the end objective or simply a transition on the way to elimination of SSI. Rather, I should say, that I've never heard anyone suggest that the proposal was anything other than permanent. The pyramid scheme we have now is inherently inviable over the long term and the politicians who came up with it should be hanged in effigy, but I don't know that the proposed replacement is, either. Perhaps a little delay in privatization will result in a proposal that is a clearer transition to elimination, which should be the objective, IMO.
Karen |
