Peter G. Masullo, a respected NY accountant, well known for his gloomy forecasts of death and taxes, is again making bold predictions. At his annual address before the graduating class of the School of Hard Knox, Mr. Masullo had the audacity to contradict every economist on Wall Street when he advanced his wild proposition that our current economic prosperity would someday come to an end.

Members of the audience became visibly agitated when Masullo’s tongue and cheek praise for the current administration turned into a scathing attack. "I must give credit where credit is due," quipped Masullo. "I am infinitely grateful to Al Gore for inventing the internet. This has opened enormous possibilities for my business. We are now on a level playing field with the largest accounting and law firms in the world. However, Al Gore has not demonstrated the same acumen when it comes to our nation’s record-breaking trade deficits. Even Greenspan will not be able to save us from our excesses in this area."

We checked the record and found Masullo to be right on target with regard to trade deficits. We continue to import more from Japan and China than they import from us. Although this trade imbalance reaches a new record each month, no one in Washington seems to be aware of the problem. To the contrary, Masullo believes the administration has exacerbated the problem by exporting jobs and currency through overly generous trade policies.

Masullo has long been criticized for his eccentricities. One of his best clients recently explained, "He’s gone off the deep end! Masullo is always finding something to worry about. He should be committed to Bellevue for psychiatric observation." Although some think the old man has gone crazy, we think he raises a valid point here. Our readers would be wise to heed some of his cautionary remarks.

"The good times may roll for another year. Or maybe another 10 years, I just don’t know. The point is that wild economic extravagances such as our current trade deficits rarely lead to happy endings. What happens when these nations find a more attractive investment alternative than the US dollar? What if they all decide to cash in their dollars at the same time? I don’t think we can foresee the implications and potential consequences of our failure to acknowledge these major problems with our international trading partners."

Masullo’s advice to escape economic catastrophe: "Avoid excess in all aspects of your financial life. Don’t borrow too much. Re-evaluate your risk tolerance level. Don’t invest too much in the same company or industry. Don’t spend too much. Reduce your fixed overhead, and most importantly, put some grain aside for when the lean years come."

Peter G. Masullo, CPA
A NY Accountant
Specializing in
Tax Services
www.cpa-taxlawyer.com