Today John Boehner and Nancy Pelosi — the Speaker of the House and the House Minority Leader, respectively — jointly issued a statement announcing the end of the United States House of Representatives page program.
The House page program began in the 1820s. In the decades since, thousands of young people have served as pages. In recent years, however, technology has rendered the pages obsolete. With the introduction of email, the internet, and smart phones, pages are no longer needed to deliver messages or documents to House members. Eliminating the program is expected to save more than $5 million a year.
I recognize that there are certain civic attributes to the idea of giving young people firsthand experience with the legislative process. Nevertheless, I applaud this decision, both because it was done through bipartisan agreement and because it represents exactly the kind of careful evaluation that Congress needs to perform on all federal programs and expenditures during this time of runaway budget deficits. The savings may not seem like much in an era of trillion-dollar deficits, but small savings can add up — and in any case, why spend even $5 million on an unnecessary program, when most of that money would need to be borrowed?
It’s hard not to be depressed about the anvil drops on the stock market. Many of us have lost about 10 percent of our intended retirement nest eggs in the space of only a few days. However, my grandmother said every cloud has a silver lining, and I always have tried to follow my grandmother’s wise advice. So, here is my attempt to come up with some positive thoughts about the recent performance of the stock market:
* It’s knocked the stories about the Ohio State football program off the front page
* I’ve been told that gray hairs make me look distinguished
* I probably won’t like eating dinner at 4:30 p.m. until I’m in my 80s, anyway
* Hey, maybe now people won’t think I’m “wealthy” and want to increase my taxes!
With the wild stock market swings in recent days I thought it might be helpful to recommend a book I just finished today, The Great Depression Ahead by Harry Dent.
It is an excellent book which is simple to understand that everyone who is an investor should read with an open mind of course. Mr Dent is a long term stock market bull who predicted the technology boom and it’s demise and turned bearish a few years ago. He is predicting Dow 3500 – 3800 between now and 2014.
The premise of the book is that simple trends drive long – term growth and that changes in demographic and technology cycles are critical in predicting business and economic trends. He mentions that government intervention (QE2, stimulus etc) can sometimes delay, but won’t be able to overcome the massive baby boom generation productivity, earning and spending power that have now peaked.
He uses data going back to the mid – 1800’s to come up with three different cycles – the 80 year lifetime cycle (last peaked in 1930), the 40 year generational cycle (when generational spending was at their peak in 1930 – 1970 and 2010) and the 30 year commodity cycle (that peaked in the years 1890 – 1920 – 1950 – 1980 and 2010) all converging bubbles that are popping at approximately the same time 2010 to cause an upcoming major stock market crash.
It’s his opinion that a diversified portfolio which we are all taught to have will not be able to withstand the coming stock market crash and that only cash and high yield bonds will fair well in the near future. Mr Dent believes there will be bear market rallies until 2020 -2023 at which time a new “boom period” will emerge.
My next read is going to be Aftershock by David Wiedemer, Robert Wiedemer and Cindy Spitzer, all economists who are predicting a more radical market meltdown then what Mr Dent is predicting.
Standard & Poor’s downgrading of the United States’ credit rating, from AAA to AA+, is an embarrassment to our country — but it is a lot more than that.
The downgrade is a tangible reminder that our profligate spending and borrowing ways have yielded some of our sovereignty over our own affairs to others — be they ratings agency analysts, or bond traders, or foreign governments that hold large chunks of our debt. When you borrow money, you inevitably give your creditors an element of power over your affairs. They can raise your interest rate payments or tell you you can’t buy that new car. Our staggering federal debt is giving entities like Standard & Poor’s or countries like China the ability to set their own benchmarks for our performance and to threaten further downgrades or higher interest rates if those benchmarks aren’t met. These developments should be deeply troubling to anyone who is paying attention.
I’m afraid that the downgrade also will be another example our government’s ostrich-like ways. Downgrades and higher interest rates are an entirely predictable result of our spendthrift budgeting, but those consequences were ignored. We can hope that, with the shock of a downgrade, our government will start to behave responsibly — but so far the signs aren’t good. Our Treasury Secretary argues that Standard & Poor’s got its math wrong, and our political leaders are just blaming each other for the problem. Senator John Kerry — that well-known paragon of balanced budgeting and fiscal responsibility — even goes so far as to call it the “Tea Party downgrade,” as if the brand-new legislators who were elected on a platform of reduced spending and who insisted that the recent debt ceiling increase include some spending reductions were responsible for our trillions of dollars in accumulated debt.
We are not only burdened with unsustainable debt, but also with an inept gaggle of “leaders” who view every crisis as just another opportunity for political spin.