Common Sense and Washington Politics

 

Common Sense and Washington Politics – Are The Two Totally Incompatible?

Regardless of all other issues facing our country, the overwhelming problem for us is our massive national debt and an endless stream of future deficit spending.  If these issues are not soon addressed we are destined to go over a real financial cliff that will make the recent fiscal cliff look more like a minor bump.  We need only look at recent situations in Greece and Spain for a hint of what such a tragedy may look like – soaring interest rates, maybe even hyperinflation, unemployment rates of 20% or higher, business and financial institution failures, evaporation of personal savings and investments, shortages of food and other necessities, riots and a collapsed economy – not a pretty picture.  However, while this kind of scenario looms as a distinct possibility in our future, the Washington establishment is doing nothing to prevent it.  Most, in both parties, continue on their merry way of looking out for themselves in the short run while not allowing longer run concerns for the country’s future to interfere.

Knowledgeable business leaders are now beginning to chime in on this.  Richard Kovacevich, former CEO of Wells Fargo appeared on CNBC’s Squawk Box show today and provided a better and more complete perspective of the mess than I tried to do previously by relating it to numbers that should be understandable to most families.  He said let’s think of our government as a family and take their numbers and knock off a bunch of zeros.  What would this family’s financial statement look like?  I believe the figures he used suggested that they would have an annual income of $25,000, annual expenses of $38,000 and a credit card balance (bill) of  $163,000.  If this were your family, what would you do?  The first thing any responsible person would do would be to get their income and expenses at least in balance if not in position to provide some degree of surplus in order to begin paying down that big credit card debt. There is no attempt in Washington to do anything similar to this.  At best they talk about merely reducing the size of the annual deficit in which case the credit card debt will still continue to grow but, hopefully, at a slightly slower rate.  Isn’t that family still headed for financial disaster?

While the Republican House of Representatives have at least attempted to introduce something approaching a balanced budget, the Democrats don’t want to have anything to do with it.  In fact, they don’t want to have a budget at all.  The Democrat senate refuses to even draft a budget.  Why?  Because their political power comes from handing out money to the largest segment of their political base, the entitlement groups, and they don’t want to do anything that may risk loosing votes, even if it means the eventual financial demise of the country.  The Democrats appear to have a political stranglehold on the country because there are simply not enough citizens who understand the critical importance of fiscal responsibility to outnumber the coalition of the entitlement groups and the do-gooders who are mesmerized by Pied Piper Obama’s tune of social justice.  If the Republicans hope to regain relevance their key challenge may be to convince enough people that this charade of continued entitlements and social justice will dry up and be blown away if fiscal responsibility is not returned to Washington.