Who Pays This Bill? From tax rebates before September 11th to massive and increasing government packages afterwards the tab is increasing to staggering proportions. Our government has a blank checkbook and freedom to spend under the guise of patriotism. Speaking from a neutral voice on the stimulus package trying to clear the senate, I see a bill packed full of upper-end corporate pork that is short-term good for specific companies but little else. Lest one tries to impress upon me the failed theory of trickle-down economics, we already tried that one under Reagan's regime. Read my lips, taxes were raised and the economy collapsed beneath the burden soon after. Bye bye government surpluses, hello budget deficits. How does our government handle budget deficits? Why it cuts spending, of course! Wait a minute, I must have inhaled some second-hand smoke there for a moment. Our government never cuts spending... that would be too sensible. They raise taxes to cover the deficit instead. Let's assume the massive liquidity injection spurs this economy into a V-shape recovery in 2002 like the raging bulls now bellow. What does a heated economy do with sub-inflationary interest rates to work with? It catches fire! What does that do to Greenspan & Co? Puts them back on inflation watch as interest rates get ratcheted back up once again. So the endless cycle of bumpy landings continue. But, E's Will Catch Up To P's The latest mantra I hear is that next year's (?) economic recovery will see corporate earnings outpace increasing stock prices to rebalance PE ratios lower. Are you kidding me? Something stronger than second hand smoke is inhaled by those who believe that ludicrous fairy tale! Can you honestly see companies announcing positive earnings while buyers hold off on bidding shares to the moon? Just let the chips, networkers or biotechs release honest-to-goodness strong earnings right now and it will be 1999 all over again. PEs will not shrink: they will balloon. And therein lies the problem. We are destined to endure markets that move sideways in one huge trading range for years and years to come. It is predestined by Fed policy and natural cycles markets repeat. Buy & hold investors may see their former high flyers roll in a sideways range for ten to twenty years, but that will be long after they fall from favor for good.