If legislators would think about our country’s problems in terms of their own family’s we’d be more likely to get better solutions and results.
The National Debt: Over $13 trillion and growing fast.
If your own family was buried deeply in credit card debt what would your options be?
· First and foremost you would cut spending to the bone. Eliminating all discretionary items from your budget. Next you might hold a ‘yard sale’ to sell any valuable assets you held that could be liquidated to pay down your debt. You might also take a second part-time job to create more revenue.
What have our politicians actually done? They have ratcheted up spending. They have bought up ‘toxic assets’ from others. They have created more new entitlements (COBRA subsidies, new home buyers’ credits etc) than they’ve increased revenues.
They are doing the exact opposite of what any rational family would do in the same circumstances.
· If the debt was so large that there was no chance to ever pay it down you would consider personal bankruptcy.
This is not taking the high moral ground or the first choice. However, if it’s the only way to survive you might do this. General Motors and Chrysler were forced to go this route and they both continue to operate today even though many of their creditors didn’t fare too well in their reorganizations.
If the PIIGS [Portugal, Ireland, Italy, Greece and Spain] were smart they would have gone this route. Default on their national debt and start over as GM and Chrysler did. Many states in America are teetering on the verge of bankruptcy due to outrageous pension promises for civil servants [think California, NJ, PA] but instead of taking the necessary steps to fix things they are delaying action because of Stimulus money from the Federal government that allowed them to keep up their old destructive spending habits. This allowed them to fall deeper into debt while avoiding the hard decisions that were needed but politically unpopular.
Temporary stimulus funds are akin to financial heroin- a great short-term high that causes addiction and ruins lives.
The Solution: America should cut spending, sell off assets and pay down debt before it becomes impossible to accomplish without default. Our leaders need to defuse the pension crisis by refusing to hire even one more new worker with a defined benefit pension plan. Make civil servants function like all the rest of society instead of treating government workers as the ‘Golden Children’ to be subsidized by all non-government workers.
Closing virtually all foreign military bases and pulling out of the Middle East wars would make a huge difference in our spending needs. We’re not accomplishing our goals overseas and we can no longer afford to be the policemen of the world.
The Housing Crisis: