Thursday, January 27, 2011

Interest Inferno

You cannot drown an inferno by peeing on it. You can’t win a gunfight with a water pistol. You will never grow chickens by planting eggs, so why do career politicians expect us to believe that they are being responsible when they cut spending across the board by five per cent (5%)? The interest on the United States’ national debt is $600 million dollars per day…Six Hundred Million Dollars per day for interest on the national debt. Neither one defense armament nor one welfare check can theoretically be purchased or paid from the first six tenths of a billion dollars every day of the year. Obviously, there is no serious consideration about reducing the principle because our leaders continue to borrow funds to pay the interest on previously borrowed money. Good grief!
Cutting the federal budget in a meaningful fashion will require much more than token freezes and symbolic 5% across the board cuts. In order to implement significant reductions in federal outlays, the government must eliminate entire departments and their functions. Wholesale savings can be achieved only by re-orienting the federal mission from a “do all things for all people” to the constitutionally proscribed limited purpose for the government. We must, however, be cautious if the federal monolith were to suddenly rediscover its constitutional mandate because the nature of the political animal is to mandate that the states pick up the torch and provide the federally discarded programs. If you were to do an historical analysis of the Medicaid entitlement, you would be forewarned.
Alexander Pope wrote “Hope springs eternal in the human breast,” and expecting Congress to behave responsibly by massively reducing the size and reach of the federal government is like expecting elephants to fly in formation. As a result of their lack of courage, wisdom and integrity, we will be faced with a game of fiscal chicken in the United States. Cities, states and other governmental units will belly-up to the bailout trough while begging for some federal fiat funny money to put off the inevitable for a short time longer. If the federal government is the first to fail, it will have the same impact as a massive asteroid landing in the center of the nation….destroying much and disrupting everything. On the other hand, if one of the sates or several local governments were to collapse, then the ominous sound of clicking dominoes will reverberate throughout the land…and the globe.
Unfortunately for the sake of our nation, our citizens and our future, politicians lack the courage to do what’s right. Their priorities are to please all their constituencies and to kick the can down the road. The spending goes on, the borrowing continues (note the upcoming vote to increase the debt limit), the daily cost of interest grows larger, and “we the sheeple” get fleeced and slaughtered.
Oh, one final note. Even if they stop the borrowing (fat chance), and if interest rates climb upward, the $600 million dollars per day will be a pleasant memory.

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