Courtesy of Larry Doyle.
What about me? What is in it for me? How does this work for me? The “ME” mentality strikes me as central to America’s new official economic policy.
Who is “ME”? Our Washington politicos.
What policy is that? Let’s navigate.
Having recently sidestepped the fiscal cliff, as we continue to navigate the economic landscape we are now faced, as the FT describes them, with “three enormous gorges.” Sounds ominous, right? What are the three gorges?
1. The debt ceiling.
The maximum amount of monies the United States can borrow. The debt ceiling was created under the Second Liberty Bond Act of 1917, putting a “ceiling” on the amount of bonds the United States can issue. As of the end of July, 2011 the debt ceiling was set at $14.3 trillion.
A mere 20 months later the ceiling is now $16.4 trillion and we are faced with the need to raise it once again. Folks, that is $2.1 trillion in the course of 20 months. Can you say, “drunken sailor?” That is your kids’ future being spent right now.
2. The continuing resolution.
The continuing resolution (CR) is a law that provides temporary funding for those parts of the federal government for which annual appropriations laws have not yet been enacted.
Our nation is currently operating on a continuing resolution that expires on March 27th. Why would our government need to have “temporary” funding? Because the clowns in Washington have not enacted a budget nor will there even be a 2013 budget proposal made by the White House by February 4th, even though the law mandates that the President submit one.
Who needs laws? Laws are merely for the little people, right?
3. Sequestration
It’s a package of automatic spending cuts that’s part of the Budget Control Act (BCA), which was passed in August 2011. The cuts, which are projected to total $1.2 trillion, are scheduled to begin in 2013 and end in 2021, evenly divided over the nine-year period. The cuts are also evenly split between defense spending — with spending on wars exempt — and discretionary domestic spending, which exempts most spending on entitlements like Social Security and Medicaid, as the Bipartisan Policy Center explains. The total cuts for 2013 will be $109 billion, according to the new White House report.
These automatic spending cuts totaling approximately $1.2 trillion are scheduled to kick in on March 1. Will they? But what about the major spending programs, those being the entitlements? Will we ever muster the discipline to reform these Ponzi-style programs?
When taken in totality, navigating these three gorges present real challenges and will require real work. Perhaps we may use the term, “discipline.” Regrettably that is a term with which Washington is not familiar. Why so? Discipline does not help win elections in many if not most Congressional districts. Continuing to “screw the kids” is far more palatable for most politicians in and around Washington.
This “screw the kids”, aka “kick the can”, approach initially utilized as a stop gap strikes me as now having become our official United States economic policy from both a fiscal and monetary standpoint.
As for the American public, do people even care? Why do I ask? Like a bevy of mushrooms, Washington continues to feed us a pile of *&^! and keeps us in the dark.
Unfortunately I think a significant percentage of people in our nation have no problem with that. Why so? Sprinkle a little “salt” and mix in a little bacon or pork with that *%^! and it tastes OK.
God help us but more importantly I hope God helps our kids. I would encourage our kids to organize and send a message to Washington. What message should that be?
Social Security? Medicare? Medicaid?
“WE AIN’T PAYING THESE BILLS . . . SO NAVIGATE ACCORDINGLY!!”
Larry Doyle
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I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.
