“The main difference that we came out of there with was, ‘do you want to rein in Wall Street?’”

That particular Pelosi quote made my head explode, but I’ve pieced it back together. For a person to ask such a question who leads an institution that was just as responsible for the financial woes in which we now find ourselves (likely more so) as the hated Wall Street takes chutzpah. Compound this culpability with the massive government expansion we’re seeing and we understand the unease of the populace, as numerous polls now show. If she’d focus at least as hard on “reining in” Washington, she might have something.

And for the zillionth time, it’s a favorable–not putative–tax policy that saves the day, one in which financial advisors have a big hand. Donald Luskin’s piece in today’s Wall Street Journal details the impact Roth conversions will have on the health of federal coffers.

“When this miracle happens, don’t let anyone tell you it was Obamanomics or stimulus that caused it. In reality, it will be the unexpected result of an obscure provision of the Bush tax cuts that’s been hiding in plain sight since 2006. That’s right, the much-maligned Bush tax cuts are going to save the day.”

Although it’s admittedly anecdotal, most advisors we’ve spoken with don’t believe Roth conversions in 2010 will be all that big a deal, something Luskin acknowledges and addresses:

“Is the IRA market really big enough to do that? Maybe not on its own, but qualified distributions from 401(k), 403(b) and even defined-benefit pension plans could be converted to Roth IRAs under the new rules, according to Mann Associates… My firm, Trend Macrolytics, estimates that there is at least $9 trillion in these tax-deferred vehicles. About 60 percent of that, or $5.4 trillion, is in the hands of the wealthiest 10 percent of households, and most of that is eligible to be converted. If just 10 percent of it is converted, then taxes would be paid on $540 billion at a 35 percent rate–generating a $189 billion revenue surprise for the U.S. Treasury [emphasis ours].”

For as much as they were vilified, President Obama has kept so many of the Bush Administration’s domestic and foreign policy initiatives in place. And one could now play a major role in saving his first-term economic agenda.