CapitalistMarks

Debt really is a burden.

Posted on 15. Feb, 2010 by scott in economic daydreaming, political munglings

There is a reason that economists, and average Joe’s, call America’s debt a burden.  Because it really is a burden: a load that is difficult to bear, something that is oppressive.

Need I go further?  Apparently so, as our leaders in Washington seem to share the opinion that in all cases regarding re-election increasing debt is an okay thing.

Hence, to help get re-elected the majority democratic House increased the ‘legal’ debt limit of our wonderful nation to $14.2 trillion.  And then Obama signed the new ‘legal’ debt limit into law.  That was the easy thing to do.  The hard thing?  Balance the freakin’ budget you knuckleheads!!

What does the new debt ceiling accomplish?

For one thing the democrats in Washington (the ‘never met a government transfer payment too large or too extravagant to pass’ democrats) now have clear sailing to spend about $1.5 trillion MORE than they already have.  And, if history is any indicator, they will spend it fast and furiously with no consideration for the long-term consequences or their misguided selfish and ’socialist’ tendencies.

As I have said many times in the past, I am neither democrat nor republican (though I clearly lean toward the conservative side of nearly all fiscal issues).  Yet, when I see gross incompetence and even grosser ignorance I do not hesitate to call a spade a spade.

Therefor here I go.

The democrat majority in the House and the Senate, with a little ‘egging on’ from the democrat White House, are on a spend and expand (as in government) spree the likes of which we have never seen.

Nearly everyone in D.C. agrees that the current recession is either out or on its way.  Yet Demo’s are hustling through the House yet another stimulus.  And, as evidence that the public is rejecting their already extravagant spending, they insist on adding more $$ to pretend to create jobs and to do so without consulting (read ‘listen to’) their cohorts on the right.  This has nothing to do with really creating employment since any results would be many months (here read ‘after the coming election’) from being proven.  They are doing it just for show and for votes.

I hope the American people see through this sham.  Brought to you by the same people that promised unemployment of 8% or less if the $758 Billion stimulus bill was passed (it is at or near 10% now).

So who are we to trust?  Not the republicans, sadly, those guys brought a tripling and quadrupling of our deficit during the Bush years.  Fiscal conservatives? Hardly!

We must all recognize that our debt really does matter.  China owns a chunk of it.  So does Saudi Arabia.  Does anyone in their right mind think those dudes are our ‘freinds’?  Hardly!  What if the bank that owned your mortgage hated your guts . . . do you think for a second that they would ‘work’ it out with you?

On top of that is the cost of servicing any debt we ‘bear’ in that burden.  At current interest rates that cost is normatively low . . . but who expects interest rates to remain at all-time record lows?  No one outside of the Washington beltway.  Debt service could soon be HUGE!

You and I can’t operate our lives at a deficit — not for long anyway.  Cities and counties can’t either.  Most states can’t by law (even with Arnold the ‘Gobernator’  at the helm).

So how can the federal government?

Because of war goes the historical party line.

Yet the costs of the ‘wars’ we are in now are only a small part of our federal budget.   Don’t buy that old argument today.  We always have high defense costs and the incremental costs of the current  ’wars’ are really small overall — even though in the tens of billions of $$.   The federal budget for next year is over $3.5 trillion  and annual ‘war’ costs are less than 3% of that.

Government spending is totally OUT OF CONTROL.

We can’t continue with the current debt burden.  Politicians aren’t going to do anything but talk and ignore the problem.  They are ‘professionals’ after all . . . too smart to listen to you and I.

Solutions?  Get citizen politicians to serve for one or two terms.  Let them handle the purse strings like they would their own.  Tight and conservative.

Economics is too often about politics.  The vice-versa isn’t necessarily true.

Vote against ALL incumbents and for citizen leaders willing to serve for ONLY a few years.

I bet you that if we all do this the whole ‘burden’ issue will be moot in a decade.

And if you don’t think your voice can be heard then you are wrong.

United we stand . . .  divided we fall (and the fall would be much greater than any you ever heard of in the stock markets).

thanks to flickr’s azrainman for the photo

Tags: citizen politicians, cost of war, debt burden, debt carrying costs, federal budget, federal deficit, politics and economics