""Americans in their twenties and thirties," he writes, including himself in the latter group, "confront an especially grim future unless a radical change in direction occurs very soon. ... Taxes are certain to be increased - especially if we include inflation as a tax - throughout our lives." With the steadily increasing share of earnings appropriated by government, "the amount of money this age group will have left to save for the future will be pitifully small ... we can safely say that most of us will never be able to retire. A world in which people's productive lives ended around 60 or even earlier will seem like something out of science fiction.
"The price for the political decisions of previous generations who enjoyed rather a nice ride while it lasted, had to be paid by someone. It will be paid by us."
"A bit of recent news that hasn't gotten enough press is the fact that the Federal Reserve has surpassed China in total U.S. Treasury holdings and is now the largest holder of Treasuries in the world. As of last week, China held $896 billion of Treasuries while Japan held $877 billion. The Fed now holds $1.108 trillion and it has not even passed the halfway mark of its second round of money printing, which they call Quantitative Easing.
By June the Fed could own $1.6 trillion of Treasury bonds. The experiment that the Fed has embarked upon is simply unprecedented in this country. "
The scary thing is we have become so dependent on the spending that a simple 10% cut to the federal budget would double unemployment.
When things were good, we spent way too much so that now when we do need a rainy day fund, we are writing checks on a closed account.
Thomas Sowell: There are no solutions, just trade-offs.
SS109 wrote: The scary thing is we have become so dependent on the spending that a simple 10% cut to the federal budget would double unemployment.
Where does that come from, I have not heard it. Even if it is true, it is take your castor oil now or your enema later.
I do not think that we can kick the can down the road any longer. (I guess in the interests of full disclosure, I have thought that for probably 30 years and each time the economy has grown me wrong).
