BOSTON - Investors have been stowing away cash and piling into bond funds. That may give them peace of mind. 

But it's looking backward, not forward, said Dr. Jerry Webman, chief economist of the Oppenheimer Funds at the NICSA general membership meeting here.

"Most of our clients,'' he said, "are positioned very well for 2008.''

But not the 'turmoil of 2013."

That's when the largest single leap in federal taxation takes place, since World War II, he said. Overall, taxes will jump at effectively an amount equal to 3.5% of gross domestic product. The previous post-war record? Half that, in 1968. The typical "jump"? More on the order of six-tenths of a percent.

That will mean investors will find themselves struggling to figure out how to adjust for the money taken out their pockets. "Someone is going to pay more taxes,'' said Webman. Unclear, so far, is whether it's the average American or the wealthy American.

But with U.S. Treasury bonds earning about 1.6% and inflation running at 2%, investing in bond funds when they're producing a negative yield doesn't make up for anything. It means more decline in spending power.

Nonetheless, investors have put $1 trillion in bond funds since the 2008 credit crisis erupted and the U.S. bond remains the safe haven, when things go bad, even when a ratings agency downgrades its safety.

Meanwhile, investors have taken more than $500 billion out of domestic stock funds.

The resolution for clients?

Moving them into debt with higher rates of return, such as junk bonds and certain forms of municipal bonds.

And ... stocks. There is a "decent amount of momentum in the economy,'' he said. The trick, in this case, as almost always, is to find companies whose growth in revenue and profit will exceed the basic growth of a country's output.

He says full recovery of the nation's economy likely will take another five to eight years; and the prescription for ending deficits that reached $1 trillion a year after the crisis is probably 80% spending cuts and 20% tax increases.

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