Freedom for Sale

I wanna glide down over Mulholland
I wanna write her name in the sky
Gonna free fall out into nothin'
Gonna leave this world for a while
--Tom Petty

Nice passage from a recent Richard Russell nightly missive. He was reflecting on a recent Q&A session among investors that he attended.

"One visitor asked what I'd do if I was running the country now. I answered, 'I wouldn't do a thing. I'd allow the bear market to run its course.' To my surprise, the crowd applauded wildly. Obviously, a lot of people disagree with the policy of bailing out everything that looks sick. I think this is a policy that is going to fail, and it's a policy that's going to strap the US with almost uncontrollable debt and interest on the debt for years to come.

"The policy is: Spend whatever it takes now, and as for the trillions of dollars in new debt, let the politicians of tomorrow deal with the 'impossible debts' and let our kids and grandkids pay with rising taxes.

"There are two things I will say about the situation with certainty. The standard of living in the US is sure to decline. And the international power of the US will decline. To put it bluntly, the US will not be the undisputed leader of the world, as it has been since World War II.

"The US cannot lead the world and at the same time be the world's biggest debtor. The marvelous US lifestyle of recent decades depends on our creditors sending us their goods and their savings (over $2 billion a day). This is unsustainable. That which is unsustainable will end."

It boils down to this truism: Debt reduces freedom.