Friday, February 5, 2010

Fearless Fosdick's Financial Forecasts

Financial forecasts are the consequences of trends.
Trends may be disrupted by cataclysmic events.
But it helps to have some idea
Of how trends might affect the financial future.

For example, the (almost) free ride called Medicare
That oldsters receive from the taxpayers
Is about to go bust,
Leaving recipients holding the bag.

When Medicare dies, health premiums will skyrocket
For those with substantial resources.
Those without will be thrown to Medicaid,
Which effectively means no health care at all.

Climbing out of recession, productivity has improved
But unemployment continues at a high level.
Two plus two still equals four
So a lot of lost jobs will never return.

The wage differential will continue to narrow
Between developing and mature economies.
Just as water seeks the lower level, wages for
Similar work must decline in the latter.

The hurt becomes especially painful
For those with college degrees
Who have no job and student loans yet to pay,
Resulting in a surplus of over-educated applicants.

The (formerly) richest country in the world
Has acquired third world characteristics.
The republic can no longer afford to be
The keeper as well as the guardian of its citizens.

The next casualty of taxpayer largesse
Will be the gradual demise of Social Security.
This gigantic Ponzi scheme will be no "security"
For the hordes of Baby Boomers ready to retire.

The good side is that increases in tax deferred investment plans
Will expand the capital available for invention and innovation.
The down side is that the indigent and feckless
Will be more dependent on the kindness of strangers.

It is a sober picture of a widening gap
Between the haves and the have-nots.
As the median standard of living in the USA
Sinks slowly toward the base line of emerging nations.

Demand subsides as consumption decreases.
The national economy reaches stasis at a lower level.
Immigration, legal or not, slows to a trickle.
Population begins a gradual decline.

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