Sunday, March 22, 2009

“Washington…We Have a Problem!”

CBO, the non-partisan Congressional Budget Office, just announced late Friday afternoon that the Obama budget proposals would add an additional $2 trillion to the national debt over the next 10 years.

On top of the $8 trillion that is already expected to be added to the national debt.

CBO confirmed that the Obama budget proposals would cause $1 trillion in deficit spending per year for the next ten years.

Astronaut Jim Lovell, who was piloting the Apollo 13 spacecraft to the moon when it blew a canister, memorably said: “Houston…we have a problem!”

They had an easier time getting back home to Earth safely than we do if we go down this debt-forsaken road.

I was willing to give the new Administration and this Congress the “benefit of the doubt” simply because of the dire economic situation we are now in and the fact that the last Administration and Congresses from 2000-2008 failed to deliver in any fiscal discipline area. But the CBO announcement of the $2 trillion upward revision in the national debt over the next 9 years because of these policies is simply too enormous and scary to give anyone the benefit of the doubt any longer, even if they have only been in office less than 60 days.

The first order of business is to simply not pass this enormous, overly-ambitious budget. There are two rules everyone has to understand when it comes to understanding how to budget at any level really:

1. Stop digging yourself deeper into the hole .
2. Never forget Rule #1.

We have already put forth a much less costly way to rejuvenate the nation’s economy in the near-term: abolish the corporate income tax code. That would ‘cost’ less than 22%, in terms of deficit-creation, for the national treasury than the Obama approach for the next decade. So, we are on solid economic and budgetary ground there to begin with.

We are leaving the banking problems to others more adept at solving that labyrinth of problems but that has to be done concurrently with re-energizing the economy.

But the next step towards financial independence is far more difficult, especially when the electorate is not educated about true facts and figures that lie behind the budget spin thrown out by both parties in Washington. That is what we will try to focus on for the upcoming week and weeks and weeks to come. It is a long process to learn but not difficult to understand once you get the facts straight and without political biases attached to them.

How many of you intend to work for maybe a couple of years longer now that your retirement portfolio has been decimated over the past year? (“Decimation” is an interesting word…see derivation below [1]) Perhaps most, or all, of you and your friends and neighbors have determined that you will work a few more years in order to build up the savings you need to retire in the way you desire.

Keep that thought in mind as we go through the coming weeks of deficit-reduction spending options. If you are willing to work a little longer to provide for yourself, wouldn’t you be willing to work, in some cases, a few months, or a couple of years longer if it took the burden of enormous future debt and interest payments off the backs of your kids and grandkids, assuming you are healthy enough to do so in mind, body and soul?

If you are not willing to do it for your kids and grandkids, then do not read ‘Telemachus’ any further. The only way we are going to truly take care of these problems in the future is to look the facts square in the eye and say that we are prepared to undergo a little sacrifice now in order to provide a better future for our families and our country.

John F. Kennedy famously said in his 1961 inaugural speech: “Ask not what your country can do for you---ask what you can do for your country!”

And less than 10 years later, America landed the first man on the moon, even if Apollo 13 had trouble getting back there.

We can surely solve the long-term debt problems facing America in the next 10 years if we do “the right stuff”, oddly enough, which is what the first Mercury astronauts had to accomplish their mission.

[1] “Decimation” (Latin: decimatio; decem = "ten") was a form of military discipline used by officers in the Roman Army to punish mutinous or cowardly soldiers. Normally, 1 out of every 10 soldiers were executed by sword or bludgeoning. The word decimation is derived from Latin meaning "removal of a tenth." (Source: Wikipedia)

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