Thursday, October 17, 2013

Guest Post: Borrowing Into Oblivion

Borrowing Into Oblivion
Colonel Donald J. Myers USMC (Ret)
On Wednesday, our congress allowed our government to borrow nearly one trillion more dollars. The left was successful in convincing the majority that if the borrowing cap was not raised, the country would go into default. The horror stories about what would happen if the debt limit was not raised were off the page. The scare tactics worked and that is why they are consistently used by the left. It amazes me that so many people fail to understand that spending must conform to what one earns. Large purchases such as a car or home must be financed over years, but the monthly payments must be budgeted so that one remains above water. Our government does not seem to have learned that lesson.

A special joint committee will be established by congress to look into establishing a budget by the end of the year. Does that sound familiar? Our constitution dictates that a budget must be established each year, yet the senate has not had one since the president took office. That is why we have a Continuing Resolution which allows the government to operate for a specified period of time by using the last budget figures as a standard. What is the first advice that an advisor gives to individuals who are in debt? They are told to reduce their spending and to pay more than the minimum on their credit card. Most of us can understand that advice because it is our money, but members of congress and the president do not have that incentive. The money that they spend is not theirs so they see no sense in reducing the spending. To add to their incentive for spending, they buy votes with what they spend by telling their voters how much government money that they brought into the district.

I am old enough to remember that years ago the government budget year started in June and that was changed to October in order to give congress more time to create a budget. Why the budget year does not start on 1 January is beyond my comprehension. Having two different starts of a year seems confusing, but I suppose that is part of why it was done.

The examples of what happens when an individual, city, or country spend beyond their means are available to study if one desires. Look at Greece or Spain and what those countries are going through. Look at Detroit in this country. This was the most prosperous city in the country in the 1950's. Each of these spent money that it did not have for years. Buying votes is not just an American trait. Politicians all over the world do that except for the dictatorships where they rule by force. 

Sadly, we will probably go through all of this again in a couple of months as this continuing resolution come to an end. The tactics used this time were very successful, so I suspect that they will be used again with some added gimmicks. The solution is simple- PASS A BUDGET FOR AN ENTIRE YEAR and operate within your means.

Since our congress spent so much time finally passing this latest "crisis" it is going to take a break. We also have the Thanksgiving holiday approaching and congress will be gone again as the next deadline approaches. The Christmas and New year holidays will also see our government officials leave. When can we expect them to truly deal with the debt and spending? Added to all of this is that next year is an election year and all of the House of Representatives and a third of the senators will be concerned with their reelection. Every thing else takes a second place. 

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