The markets always win

News. Dec. 30 (Bloomberg) -- Montclair, New Jersey, where the median family income is almost twice the U.S. average, may have to shut one of its two libraries. The Newark suburb of Irvington is considering firing police officers.

The towns are bracing for the impact of state aid cuts, after Governor-elect Christopher Christie said he may slash spending by as much as 25 percent next year amid declining tax revenue

My point. Governments give away services of all types. They are very generous with our money. There is a point, however, when money runs out because it was not invested to make more money.

Governments transfer wealth from us to the bond holders. Eventually they are sucking from us all the money they can -- until there is no other alternative. The pendulum has to swing the other way. And services have to be taken out, cancelled, cut.

Yes, the markets always win. Governments can distribute income up to a point. If the services do not produce wealth (or do not help to produce wealth), they have to be terminated. Which ones? The fat, useless fat.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 by Timer Digest

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