Reply #18: Not so much the next four but 2008 [View All]

[buckanear7]

Between 2004 and 2008 what should happen will not happen and thus have to happen after 2008.

1) Major cuts to the Defense Budget

2) Major cuts to entitlements except Social Security and Medicare.

3) Repeal of Bush Tax cuts

4) Increase of FICA and Medicare Taxs.

To solve the oncoming train startign in 2008 will require action that no politician really wants to do and really hopes goes away with a booming economy. The problem is that in 2008 the bulk of baby boomers will start to retire and demand their social security checks. The so called social security surplus that has not existed since 1958. All surpluses have been borrowed to balance the federal budget. The problem will be that the excess from current FICA deductions will no longer be sufficient to pay out the demand after 2008.

By 2008 we could and most likely will see:

1) Inflation in the 6% to 9% range
2) Fed rates near 9%
3) Mortage rate between 12% and 15%
4) Unemployment rate near 9% reported, true will be closer to 12%.
5) The Dow under 5000
6) Gold over $2000 per ounce.
7) FICA Tax near 25%, Medicare 5%

This will be regardless of who is elected in 2004. Our economy will rebound in 2004 and 2005 and start a slow but steady decline starting 2006 and reaching bottom somewhere in 2012 to 2014.

Now if that is not depressing enough I might be able to give you more rosy numbers but it is too depressing.

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