"But that's not necessarily how this is going to play out"

James Suroweicki on budget concerns:

"The government can borrow money remarkably cheaply at the moment. The U.S.’ debt-to-GDP load is not high by historical standards. And the U.S. government, at least, is also better positioned to bear risk than any one company, let alone any one individual, is, thanks to its long time horizons, its borrowing power, and yes, its ability to tax. There’s no question that governments, like companies, can leverage themselves into tremendous trouble, but that’s not something the U.S. should be worried about now."

Although I by and large agree with this, we should not be sanguine about what we are having to do. It is fraught with danger, and we shouldn't kid ourselves that it isn't. We're merely stuck playing the cards we've been dealt, and it's a bad hand.

Read this from Felix Salmon:

"If stocks fall, that means they're cheaper than they were. And if they've gotten cheaper, they must be a better investment, right? That's the gist of a blog entry from Jim Surowiecki today.

But that's not necessarily how this is going to play out. It's true that stocks have been a good long-term investment in the past, but that doesn't make them a good long-term investment in the future, even if they are looking cheap(ish) these days. And to understand why, it's worth looking at a very old-fashioned indicator: the stock market's dividend yield."

By and large I'm bullish about the future, and buying stocks in a downturn makes sense, but we should be prudent in expecting the future to play out like the past. It might turn out easier, it might turn out harder, but debt and low dividends are real world concerns, and we should pay attention to them, not to panic, but to be prudent.