Spending Addicts

I’ve harped quite a bit that the US is living on the edge and that people need to get used to a reduced standard of living in the future. The reason is simple: the government and most people are consuming much more than their incomes can justify. The sad thing is that there doesn’t seem to be any repentence in the face of a crisis, just the same old deferment of apocalypse with deficit spending (see California). Somehow, the piper needs to be paid, which means much higher future tax rates or a collapse in the value of the dollar (either through inflation or default). Pick your poison. Get through the pain now while it’s still reasonable or have your children endure much greater suffering.

The CIA’s report of life in 2020 is quite gloomy, but reflects what is quite possible given exploding deficits. In short, start saving now and get used to living ascetically. Alternatively, you may choose to move to another country that has more stability, such as Canada or New Zealand.