Restoring Fiscal Sanity in the United States: A Way Forward

One of the great privileges of traveling and speaking as I do is getting to meet a wide variety of very interesting people. Of late, I have become friends with David Walker, former Comptroller General of the US, who is now crisscrossing the country warning of the deficit crisis. It is a message that my book Endgame resonates with. If we do not bring the deficit down below the growth rate of nominal GDP, we become Greece. We hit an economic wall and everything collapses. It will be a real and true Depression 2.0. Fixing this is the single most important topic and task of our generation. If we do not, worrying about P/E ratios, moving averages, long-term investments – anything else, in fact – is secondary. Solve this and we can go back to the usual issues.

This week’s Outside the Box is a presentation that David made recently. Powerful stuff. I urge you to forward this on. The message must be heard so that we can as a nation get this right. The world does not need a crippled USA.

David released a short statement about the Navy Seals getting Osama (finally!). It echoes my own thoughts.

“All Americans should come together in appreciation for the work of America's intelligence agencies and special forces who planned and executed yesterday's Osama Bin Laden operation. While his death is a key milestone in the fight against terrorism, the battle is far from over. More importantly, as I said in a CBS 60 Minutes segment in 2007, 'The greatest threat to America is not a person hiding in a cave in Afghanistan or Pakistan, it is our own fiscal irresponsibility.' That statement was true then and it is even more true now. It's now time for the President and the Congress to work together and address the fiscal debt bomb that represents a much greater threat to our country's and families futures.”

My flight was cancelled, so I am in Toronto for one more night. The folks at Horizon Funds have graciously offered to take me to an early dinner and a private wine cellar, as I have a 4:30 AM (ugh) wake-up call and will turn in early. I hate 4:30 AM. That is not a civilized time of day. If I wanted to live like Dennis Gartman I could learn to deal with it, but I guess occasionally one does what one must.

One final thought. While getting OBL is a wonderful thing, it does little to change the reality of the Middle East, and may even finally create a true martyr (albeit one who was living well, and not in a cave). The world remains unsettled. Every speaker at my recent conference was asked what keeps them up at night. Every speaker mentioned the Middle East, some rather pointedly. It is a true wild card. But let us enjoy for the moment some token of pleasure for the just end of the planner of the 9/11 tragedy.

I will report more about the conference in future letters.

Your having a lot to think about analyst,