Some pure poetry from Art Cashin today which explains why future US generations may want to hold a referendum on being born...
Partisan Politics Postpones Or Poisons Potential To Help Our Kids And Grandkids - Things turned a bit more philosophic at last night’s convocation of the Friends of Fermentation. It was not a plenary session but rather a more intimate group - about the size of a sub-committee. And, as often happens at watering holes, folks drifted in and out, going to a meeting or coming from one.
The core of the group was a trio of card-carrying members - a hedge fund veteran, an institutional floor broker and yours truly.
After running through the day’s events and action, the topic drifted, naturally, to the stunning leadership vacuum, both here and in Europe. Another bowl of peanuts was ordered and the conversation began to drift toward the possibility of the Fed doing a reprise of Operation Twist from the 1960’s. We began to focus on the Fed’s lengthening maturities when another shift took place.
For two decades, we have heard that “we” are saddling our children and grandchildren with a mountain of debt that would burden them potentially for their entire lives.
Study groups (e.g. Simpson/Bolles) tell us that there is no quick fix to these deficits and that they may take decades to rein in.
The group wondered aloud why the Treasury and the Congress were not being more opportunistic. Rates are at historical lows. Why aren’t we issuing 50 year or even 100 year treasuries? At these exceptional rates, that would allow us time enough and room enough to put the debt in order - a chance to structure the debt hodgepodge in an almost logical manner. It would give us a chance to hand off to our children something far less burdensome.
More ice cubes were marinated and the brain trust (ex me) concluded that the primary deterrent probably was that going to a 50 or 100 year might raise interest costs somewhat. That would yield, quickly, to political finger-pointing.
So, here it was again - politics. I don’t want to be accused of “busting the budget” by auctioning something that yields
several basis points more. “The kids? The hell with the kids! They ain’t voting in this election.”
Say, Sean, ya got any pretzels back there?