Robert A. Weigand

Why Economic Dogma Threatens Our Future Prosperity

I remain flattered that so many high-performance members of the SA community have commented on my article. I respectfully suggest that it's you who are missing the point. The example of tax cuts, the get-government-out-of-... fervor, and the national health care is too expensive argument are merely used as illustrations of cognitive dissonance and consonance. Like many other commenters, you have also taken the bait, overweighted one of your trigger topics (in this case taxes), and read the rest of the article as if it were blaming tax cuts for ills besides our crushing deficits. That's not what I wrote, read it again -- maybe with a blood-pressure cuff on when you get to the stuff you have dissonance towards. The point is that in swallowing the tax-cuts-pay-for-thems... B.S., and that we could have a bull market starting from a trailing P/E of 30 (in 2003), and that leverage could increase to the point that we allowed it in 2007, we were all mis-weighting information -- a serious cognitive flaw that we should be more on the alert for in the current environment. Which is why the Buffet-Gross-Grantham-... assessments are not receiving the weight they deserve right now. Ask yourself: if earnings fall 35% and grow slowly from their new lows, what level on the Dow and S&P imply 7% real returns over the long run going forward? The answer is scary . . .


On Jul 10 02:17 PM whidbey wrote:

> I think you have missed the point completely. The level of spending,
> not tax cuts, is the issue here. Tax cuts is a means of dis saving
> for individuals as a nation, but it attractives because our spending
> habits drive us to distortions and delusions about our needs to live
> happily an well. Taxes and RR are merely symptoms, not the disease
> itself.
>
> We as a nation expect that government has means and methods ordinary
> people can not possess, and can provide vastly more than tax revenues
> we want to pay . It is federal debt powers that are ruining us. The
> lack of moral character in Congress helps.
>
>
> We elect those who will spend to fulfill our wants, and needs. This
> is the fundamental dilemma of a republican form of government: the
> few can tax the many into oblivion. We need a hard currency Congress
> can not deface, spending limits for Congress that start with debt
> service first and current operations later, and a life style suitable
> to our productivity. You also got there.
>
> The capitulation you are looking for is coming, but you will not
> like it even in Topeka.