I’ve said it before and I’ll say it again. Buy tax-free bonds - now.
But, whatever you do, buy them - now.
Yes, I know that President Obama, when he was candidate Obama, promised a tax cut for 95% of Americans. But that was then and this is now…
financial system, spending who knows how many billions more.
As for candidate Obama’s promised tax cut, I’m reminded of the remark former Clinton aide George Stephanopolous once made to Larry King, "The President kept all the promises he intended to keep."
The Consequences of Federal Spending & Encroachment
The consequences of all this new federal spending and encroachment into the private sector won’t be fully apparent for years to come.
But the wild fiscal imbalance is already crystal clear. Washington politicians will soon demand that you sacrifice even more of your paycheck so that they won’t have to sacrifice the near erotic charge - and high incumbency rate - they get from spending it.
This is ironic when you consider that to a large extent it was government that landed us where we are today.
Sure, the mortgage boom and housing market bust was due in part to shameless lenders, greedy borrowers, and unscrupulous Wall Street types. But who set the stage for them?
- Who took short-term rates to the cellar, creating a massive incentive for consumers and investors to borrow?
- Who gave real estate investors a $500,000 tax exemption on their profits from flipping houses every two years?
- Who passed laws criminalizing banks’ failure to lend to subprime borrowers?
- Who set up quasi-government institutions Fannie and Freddie - or, as I prefer, Phoney and Fraudy - to warehouse those bad mortgages, leaving taxpayers to pick up the tab?
The answer? The federal government.
As The Free Market System "Fails"…
And what will we get as a result of this supposed "failure" of the free market system? More federal government.
I’m not sure whether to laugh or cry. But I am sure our Founding Fathers must be spinning in their graves.
- Thomas Jefferson said, "That government is best which governs least."
- George Washington said, "Government is not reason, it is not eloquence, it is force."
No wonder polls show that more than 60% of Americans are skeptical of increased government intervention in the economy.
They suddenly recognize that we’re in for a lot more government, a lot more "market failure"… and a lot more taxes.
Sadly, there isn’t much you can do about it… except buy munis now.
Good investing
Alexander Green
