The New Math

I don’t know about you but I was glad to see our elected leaders come to an agreement to avoid any default on our nation’s obligation – I think.

Otherwise I’m pretty steamed
and I’m going to tell you why. There was no reason why the remedy that was reached could not have been reached weeks, even months ago. There’s an old adage “a timely bad decision yesterday is better than a good decision tomorrow”. I don’t always agree with that adage … in this case I do. All the pontification, posturing, posing and the like does nothing to restore confidence and belief, so critical to our recovery, that better days are on the horizon – it only makes matters worse! Little’s being done with consistency to benefit main street, large companies are sitting on record high retained earnings – somewhere north of $2 trillion, venture capital firms are sitting on another $2 trillion or so. Add that up and pretty soon we’re talking real money. Why? The most consistent answer I hear is we don’t know where Washington is headed next. I share that belief. Those charged with solving the problems are the problem.

And just like all those late night product ads “But there’s more” …. There’s more.

While there has been some refreshing progress on addressing our considerable obligations who do they think they are kidding with all their seemingly endless “deficit reduction” double talk? “Lies, half-truths and innuendo” as Bert Lance suggested some years ago.

The reality of the recent debt ceiling raise and promised cuts – something I sometimes refer as “Wimpie’s Theory” in street vernacular – I’ll gladly pay you tomorrow for a hamburger today — is the deficit continues to go up!

Please feel free to click here for a link to the 2011 Budget of the United States Government. That forecast extends out to 2020. Just click on the PDF link. To save you some trouble, it’s a long read … and I’m a budgeting and numbers guy … you can scroll down to page 151 for the easiest summary.

Every single one of those years reflects a deficit of not less than $706B. You can add ‘em up but it sure sounds like $20T to me by 2020. And that assumes the numbers 9 years out are even close — that’s dubious when this years are already askew.

Please do not insult our intelligence with deficit reduction fertilizer until next Spring when it’s time to plant the garden again.

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