Posted by
OldRelayer on Sunday, April 05, 2009 11:02:40 PM
I couldn't sleep and I had this blog post rolling around in my head.
When I first started writing software for the Mortgage Industry someone said to me the average bank manager can not calculate simple interest, I didn't believe it. But in fact it is true, without a table they would be lost, without a clue. So how would we expect our political leaders to understand finance, what they do see, I think, are the reports by the CBO, whether they know how to interpret them is a whole other question. It seems to be only one of the areas that they are totally unqualified and yet they control every aspect of our lives and it is only going to get worse before it gets better.
The Bush budget was bad enough, federal spending totaled $24,000 per U.S. household. Obama’s budget would increase it to $32,000 per household by 2019 there is no way this is sustainable and the CBO projects just the interest on the debt to be almost $900 billion, almost doesn't sound like a lot because now they talk in the trillions but trust me it is a whole lot of money. Simple math, $860 billion on a daily rate is $23.5 billion per day or $98 million per minute, way more than enough for me for the rest of my life. This is going to be a never ending cycle that has no happy ending.
Imagine your are at your credit limit on your credit card and can't pay the minimum without robbing from something else. Credit card offers are coming and you decide to get another card to take off the heat and pay the minium payment which is actually just interest only, you would pay this for the rest of your life and your childrens, childrens childrens lives. Pretty soon, you need to worry not only about credit card one but also credit card 2, and one day credit card 2 is maxed and you go on to credit card 3. At some point your credit limit will not sustain this and you have a choice to make, none of the options are good, but you are affectively bankrupt no matter how you slice it. The government is not much different, but for the fact that they can print money. But there are some other options, China could say, since you have nationalized everything, I will take GM, Chrysler and the Trump tower this month instead of an interest payment. That is why it is said that all the mansions in America will only be open to Americans to clean, they will no longer own them. The other option is to print money which will cause hyper inflation. There is nothing worse for an economy than hyper inflation. That is why I spent most of my day during the hearings on the Porkulus bill screaming at Cspan saying there are much worse things than doing nothing. We all know that a simple capital gains cut and or corporate tax decrease would have stimulated the economy like nothing else. Either way it is the end of the line for America, even the people that thought they had the world on a string by taking everything and spending foolishly in our name and with our money will be in the same state as the rest of us, or should I say our children and grandchildren. This is the America which we will leave them. We will be known as the generation that gave America away because we didn't have the guts to fight for what was right. This needs to be stopped right now, the longer it takes the harder it will be to extricate ourselves from this quicksand.