Politicians are always ready to give us what they think we want (health care, social security, medicare, housing, unemployment benefits,....).
They are all great social programs. But we have to produce the wealth to pay for them.
If we do not produce the wealth to pay for them, the government will have to sell bonds. They will use the proceeds to pay for these great ideas.
The outcome is taxes will have to be raised (in the amount of the wealth we have not produced to pay for these great social programs).
Why? Because the interest on the bonds have to be paid to the bond holders.
What is the outcome? A gigantic transfer of wealth from us to the bond holders resulting in a substantial reduction of our income.
It looks like this is the time to pay the piper. Taxes are slowly and steadily being raised. Our income is in the process of being cut.
The reason is not "democrats" or "republicans". It is "us". We want more without producing the wealth to pay for it. The outcome is lower standard of living.
Make no mistake about it. The markets always win!
George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
Ranked Top Market Timer in 2009 and 2010 by Timer Digest
To find out more about my in depth views of the markets and my strategy just visit our website https://www.peterdag.com/ where you can subscribe to The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.
I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.
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