Wednesday, December 22, 2010
Christmas Shopping with Obama and the Republicans
You got to hand it to the Republicans, when they come into power, they know how to deal. The new plan they worked out with President Obama and the Democrats will balloon the American budget deficit by a whopping ...wait for it... 1 TRILLION Dollars!
Funny then how both parties had agreed in principal to address the deficit crisis. The Democrats of course, want to do it by raising taxes, targeted predominately at "the rich." The Republicans in turn want the deficit to be curbed through budget cuts aimed at social entitlements.
What happened though was that in mental abyss that we like to call party politics, somehow we ended up with lower taxes renewed and spending increased. The thinking being, "Hey, why tighten the belt and make hard choices when our Chinese friends seem more than happy to keep lending us money."
A trillion here, a trillion there, sooner or later it starts becoming real dinero.
The deficit troubles really began to hit hard when President Bush decided to engage in two wars AND cut taxes. That made as much sense as saying to my wife, "Hey Hon, let's remodel the kitchen, buy a new car, and take a vacation overseas, oh, and by the way, I've decided to go to part time at work."
Then, rather than asking the American people to stand with the soldiers fighting overseas by making sacrifices at home, the narrative from the White House was "this doesn't have to affect you much at all. Don't make sacrifices and whatever you do, keep shopping." This just reenforced into our national psyche that important things have no cost associated to them whatsoever
The downside of a democracy with a very large credit rating is that you can use that credit rating to keep showering presents on the electorate to keep them happy. Its like these celebrities who you find out are broke, but still live a high lifestyle for sometime. Their perceived wealth gives them the ability to live beyond their means for much longer than the average guy. Thats America right now. Its living a lifestyle in really can't afford and we now need politicians that can make some of the hard choices.
Either that, or we can end up like Greece where the hard choices were forced on them against their will.
Great Britain has done it though. Finding themselves in an even higher deficit than the U.S by percentage of G.D.P. they have instituted an austerity program program where they are cutting 25% almost across the board over the next five years. The people there are generally supportive of it as they see, and can appreciate, the dire consequences for them if they don't begin acting now.
Obama can't seem to make the hard choices though because he has to get himself reelected in 2012...and so the Christmas presents keep coming out...
...even though they're all Made in China!