Hype and promises abound everywhere in an environment thriving on the promotion of fear while simultaneously offering a way of escape. First-up is a $29.99 download that will fix your slow computer, next there is the $99.00 chemical additive that will repair your backed up septic system, followed by the $129.00 powder made from exclussively available South American berries that you drink with water to avoid fatigue and male pattern baldness, finally, if you still have any money left over, don’t forget to see your local mechanic for the $249.99 special polymer engine additive that will restore your dying automobile to factory condition. Often times, most of the time, these must have items are paid for on the convenient credit plans of Visa and MasterCard. Not to worry, because you can have your fix today and pay for it over the next ten years of tomorrows.
Oh yeah, in case you didn’t notice, the Dow Jones Industrial Average is collapsing, taking your 401-k down the drain, you better call 1-800-432-GOLD.
The drum continues to sound in Washington and echoes on Wall Street that the world will end next Tuesday if Congress, and specifically the House Republicans, does not craft a bill agreeable to both Harry Reid and Obama that will authorize an increase in their deficit spending until such time as the Democrat’s political hydes are clear of next year’s November elections.
Step 1 – Hype
Step 2 – Fear
Step 3 – Spend money – money that does not exist – pull out the credit card and charge it.
Step 4 – Pay bills – ooops, no money – use another credit card (raise the debt ceiling)
Step 5 – Repeat steps 1-4
How about instead trying the “CUT CAP BALANCE” routine?
Well, that’s difficult because the political pressure is great to chip away at Tea Party conservatives’ goal to rein in federal spending. In today’s Wall Street Journal an opinion piece entitled, The GOP’s Reality Check, quipped,
Strangely, some Republicans and conservative activists are condemning this as a fiscal sellout. Senator Jim DeMint put out a statement raking the Speaker for seeking “a better political debt deal, instead of a debt solution” (emphasis, needless to say, his). The usually sensible Club for Growth and Heritage Action, the political arm of the Heritage Foundation, are scoring a vote for the Boehner plan as negative on similar grounds.
But what none of these critics have is an alternative strategy for achieving anything nearly as fiscally or politically beneficial as Mr. Boehner’s plan. The idea seems to be that if the House GOP refuses to raise the debt ceiling, a default crisis or gradual government shutdown will ensue, and the public will turn en masse against . . . Barack Obama. The Republican House that failed to raise the debt ceiling would somehow escape all blame. Then Democrats would have no choice but to pass a balanced-budget amendment and reform entitlements, and the tea-party Hobbits could return to Middle Earth having defeated Mordor.
This is the kind of crack political thinking that turned Sharron Angle and Christine O’Donnell into GOP Senate nominees. The reality is that the debt limit will be raised one way or another, and the only issue now is with how much fiscal reform and what political fallout.
Hobits and “crack pot political thinking”. Well, someone has got to turn off the open spigot in Washington DC from which uncontrolled spending flows so freely. If it takes Bilbo Baggins, Christine O’Donnell and Sharron Angle to do that, then so be it; but someone has to stop the hemorrhaging.
What exactly will an additional two trillion dollars in debt cost the American tax payers over the life of this loan? If Visa and MasterCard are required by federal banking reform law to inform consumers regarding minimum payments and the costs of interest over the life of the loan based on various repayment schedules, should not Washington let the American public know the cost of this meager two trillion dollar increase if we continue to pay the monthly minimums?
Hint: Let’s stop buying the gimmick computer fixes, the chemical septic additives, the magical dietary powders and the polymer engine additives and put away the over utilized credit card. It’s time to pull out a hatchet and begin to enact meaningful spending cuts.