Friday, December 11, 2009

A Scary Lesson in Government Financial Planning

I handle the finances in Chateau Fundfamily, and Mrs. Fundman and I are in agreement that this is the best way to handle it. You see, I'm cheap, and Mrs. Fundman is not so much. I may not be as cheap as La Cheapa Chica, but I tend to view Dave Ramsey as a more appropriate role model than say, Nicholas Cage. So I turn down the thermostat in the winter, bring back little shampoo bottles from hotels, and buy meat when it's marked way, way down at the story. I don't dumpster dive, but hey, you never know.

In government, no one is Dave Ramsey, and everyone is Nick Cage, and lately, everyone has been like Nick Cage with a vengeance. Of course it's easy to be Nick Cage when you are spending other people's money, and that's what governments do. The only broad limits on insane government spending of OUR money has been a legal limit on the amount of debt the U.S. government can use to fund its activities - 12 trillion bucks.

You'd think that in addition to tax revenues, a 12 trillion dollar limit would be enough to run a country no? Well apparently it isn't because now they need more credit. And unlike normal people, the government doesn't need the approval of Visa or Amex to raise their credit card limit. Congress votes on it. So imagine if you could take out a credit card, and just keep raising the limit - awesome no? And the debt you put on the card was paid off with someone else's money in 30 years after you had retired and made a mint as a lobbyist and paid speaker.

Well yesterday the Democratic House leadership said they were going to have to raise the debt ceiling - by 1.8 TRILLION dollars (1,800,000,000,000). If that isn't nauseating enough, the Congress doesn't understand, at all, the ramifications of this. Take a look at this quote from David Obey, the Chairman of the House Appropriations committee:
“It is December. We don’t really have a choice,” Obey told POLITICO. “The bill’s already been run up; the credit card has already been used. When you get the bill in the mail you need to pay it.”
Now David Obey is head of the committee that appropriates all, ALL, of the expenditures for the House. This guy is the top shopper for all of the U.S. government along with his colleague in the Senate. Consider his quote about the credit card "has been used" and the bill needs to be paid.................

Dave, buddy, YOU ARE NOT PAYING FOR THE BILL BY RAISING THE DEBT CEILING. No, Dave you are ADDING TO THE BILL. Trust me; I handle the finances for my family, and I don't think a bill has been paid when I simply borrow money from someone to pay someone else. But this apparently is the way that the government thinks. You "pay" bills by borrowing money. And while most U.S. families are cutting their debt burden by not borrowing more money, the government is doing the opposite and apparently thinks that's fine.

If the government would like to actually "pay" it's bills I have some suggestions on that matter - spend less, and pay down the debt. In a regime that is supposed to have democratic tendencies, the Congress may want to look at the actions of their constituents and learn a thing or two. A novel idea in politics today.

1 comment:

  1. As we commit ourselves and our progeny to servitude, we have (through proxy) relieved ourselves of liberty – yet in our dizzying holi-haze, we have little noticed.