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- The Week / Forget the Social Security
- Friday Feature / Analog Opportunities
- Friday Blogger Bonus / Beijing Duck
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Thanks for your heroic work over the years. This website is a national treasure.
please forget the social security "problem."
solve "problems." When you solve problems, you feed your failures,
starve your strengths, and achieve costly mediocrity.
Nothing good is going to come from political haggling over some bogus social security crisis decades in the future, when our economy will be entirely different and hugely more productive.
We have to get beyond the idea that any reshuffling of taxes and spending today will improve the economy's ability to support medical care, housing and transport for the aged, such as myself, in 2027. That will depend not on actuarial trumpery but on the realities of productivity, technology, and immigration.
Only if we raise tax rates and regulations and cripple the GOP and our defenses with delusionary spending cuts can social security become a crisis. Yet that sums up the likely grand compact, doesn't it? Higher tax rates in some form or other, some jerrybuilt pension scheme full of government regulations on our financial markets, and gimcrack spending cuts that end up focusing on defense.
We should take the offensive. Lower tax rates will yield the additional revenues and borrowing power we need to sustain social programs for the aged in coming decades.
As a key first step, we need to reduce the payroll tax by at least one third.
Indeed, as part of a flat tax program, we should eliminate the payroll tax.
Make the Democrats talk about that, not about spending cuts, which always turn out to focus on defense. In a dangerous world, we will need defense.
Eurofare economic policies like Germany's would obviously destroy our ability to supply goods and services to coming generations. Under those conditions we would have to inflate away the liabilities one way or another. It may be horrible, but no conceivable compact with the Democrats today can save us from the nemesis of socialism. Indeed, a compact with the Democrats will tend to cripple the necessary Republican resistance.
If we keep our tax rates low, however, we will discover that this economy in future decades can easily sustain the necessary 40 trillion dollars of additional debt. Read Ken Fisher's The Only Three Questions That Count.
He believes that the U.S. incurs too little debt compared to the productivity of incremental investment. His regressions show that the larger the budget and trade deficits the higher the stock market. We already command a steadily growing resource of some $110 trillion of assets. We are already running an all-governmental surplus. Our corporations are laden with cash. Our current debt asset ratio is sub-optimally conservative.
The only thing that matters, as you know, is economic growth. Focus on that. Let Democrat accountant economists grouse about debt.
Don't solve problems. Pursue Opportunities. This is the Wealth creation website!
– George Gilder
Read Don Luskin’s reply:
The Friday Letter Book of the Month
By Ken Fisher, with Jennifer Chou, Lara Hoffmans and
James Cramer (Forward)
Friday Feature / Analog Opportunities
GTR Subscriber 12/19/06: Paul McWilliams seems to be down on National Semiconductor (NSM) and analog chipmakers in general. I recall you had some positive things to say about NSM and its opportunities a couple of months ago. Can you share your latest thoughts on NSM and analog chipmakers?
George Gilder 12/19/06: NSM has had a large move, responding to its change in focus to a pure analog line, with a few leading edge A-to-Ds and D-to-As added. Analog companies have faced integration fears throughout their ascent to dominance among microchip companies in ROI. But if you want to play both sides of the power theme, I recommend purchase of Power-One (PWER) at this price. Its long-term advance is just beginning, while NSM has had a nice ride already.
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Friday Blogger Bonus / Beijing Duck
Andy Kessler 12/12/06: Treasury Secretary Henry Paulson, Federal Reserve Chairman
Ben Bernanke and other polished cabinetry are visiting China later this week.
They'll see fields of skyscrapers, traffic jams of new cars and designer
couture replacing the old Maoist uniform with five buttons and too-long
sleeves. In other words, we've got the Chinese right where we want 'em.
Sure, the China Miracle is impressive -- double-digit economic growth, exports up 30%, a $150-billion trade surplus and a trillion dollars of foreign currency in their treasury as reserves. The prevailing opinion is that at any moment, China can stop funding U.S. budget deficits by not buying our bonds -- so Messrs. Paulson and Bernanke should come hat in hand and beg for indulgence. Don't believe it.
Your hotel will probably be on a street that didn't exist two years ago. The traffic jam getting you there? It's from the 1.4 million new family car drivers in Beijing, now just learning how to drive -- and not too well. Think of China as a bunch of high school kids (albeit with strict parents) with new driver's licenses and you won't be far off. Don't give them the keys to anything. Be a little coy. From the consumers to the government, they are simply adolescents.
China consumes one-eighth of the world's energy, one in four tons of steel and aluminum, and almost half of the world's cement. According to Stephen Roach at Morgan Stanley, half of China's GDP is fixed investment. They pay for this with loans from Chinese banks backed by our dollars. Like a teenager who stole Grandma's checkbook, the Miracle seems to be based on writing bad checks ….
Check out Andy Kessler’s site:
Forbes Sneak Peek 2007
Qualcomm Sees Stronger Demand For Cellphone Chips Than Expected
The Elves are Computerized
Deficit Analysis Is A Two-Handed Job
How Bell Labs Missed The Microchip
Opens Lab In Redmond
Device Stores Light
Claims Photonics Speed Record
To Set Up $50 Million Solar Fab In India
Claims 3-megapixel Image Sensor For Phones
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