Nice points re: health care. I'd like to hear more of your thoughts about the economics and politics of it. Very intriguing stuff, to say the least.
As far as taxes go, I've been saying for months he won't actually lower taxes on the rich. Now I have it on really good word that he's telling this to his rich donors, in private, to their faces. Recently Kevin Hassett said he will do what is pragmatic to balance the budget, cap govt. spending at 20% of GDP, and won't cut taxes for the rich if that's what is required to meet these goals. He's going Reagan, but opposite on the debt front.
Social security must be reformed and I have no reason to believe democrats have any intention of fixing it. They failed to do so with two years of total control. But with a democratic senate, republicans will have to offer compromises like assuring the elderly who are unable to work will receive benefits at younger ages. Hopefully there will also be incentives to hire older workers who are currently being pushed out of employment due to age. We need political reasons to make these bargains.
On a much larger scale, I think a lot hinges on China. We weren't scared to go after Japanese export oriented meddling in 1985 & I have no reason to believe Romney won't push for the Chinese version of a Plaza Accord. Either way, export dependent eras always end badly if the offending nation doesn't change their ways (USA 1929, Japan 1985, Germany today to some extent). They have to, so China is staring at two choices. They can either "dump" dollars & create a more consumer oriented internal economy and hope it works, or, they can keep relying on exports and hope the drag this creates on the rest of the world won't hold growth down too much. At some point though, trade imbalances & homeland debt becomes too heavy & policy responses become necessary. If other factors don't overcome the Chinese labor advantage then we will respond. China is on the verge of a depression and our response will likely push them into one. That will cause a plunge in commodity import prices, & I hope we'd be smart enough to raise fuel taxes to overcome the downward pull on fuel efficiency gains.
There's also a good possibility that Japan will be forced to "dump" dollars to fund their own pensions. Dumping is scary to gold bugs but it is the healthy antithesis to trade imbalances and will put Americans to work as dollars repatriate back into the hands of our businesses. This will lower unemployment and raise Treasury revenue. If China and Japan don't dump treasuries then we'll continue inflating them away, and they'll be forced to respond to us and will inflate their value down for us. Both nations already have, and Japan just might finally kick start their economy again after two decades of malaise. China swung for the moon with their own stimulus back in 2008.
Ahh, being America kicks ***. We win no matter what you do, so you might as well get with the 20th century and join us in the 21st.
Thank you all for the stage to write that out on. It helps to clarify my thought and fine tune an investment thesis.
