Unless you’ve been living under a rock, you’ve undoubtedly heard about the proposed tax rebate that our fearless leaders in Washington have been working on. Is this really a good thing for our economy/country?
Everything I’ve been reading says that the benefit is negotiable at best. I’ve read articles that say that many of the people receiving the rebates would simply save it. That doesn’t exactly help us spend our way out of a recession. With the size of our economy, it’s easy to see how $150 billion would only be a drop in the bucket. To me, it seems like we are simply throwing a cup of water on a house fire.
So why are our politicians, both Democrats and Republicans, putting so much effort in to this initiative? If you were a politician, would you want to be the lone voice saying, “Don’t give them any money back. We need it!”? Yeah, I don’t think so either. Our politicians are all sissys that spend a significant amount of their time worrying about what the public will think of them. I guess we can’t blame them. Our system of government pretty much mandates that they do this if they want to keep getting a paycheck in Washington DC. Giving money back to people would surely help shape people’s perspectives, right? Not me.
The dollar is at all time lows against currencies around the world. Why is this? Well, the fact that we spend billions and billions more than we bring in, doesn’t help. The sheer amount of debt that our people have and our government has is clearly a significant reason for the lagging dollar. I guess you could take the alternate view and say, “Shoot. What’s another $150 billion?” With the amount of debt we have, what difference does it make? My simple mind says it all matters.
Spend some time wandering around the personal finance blog world and, rather than taking the advice personally, take all that advice on behalf of the government. Countless posts out there talk about spending less than you earn. If that’s such great advice for people, how come it doesn’t count towards a government with nearly $10 trillion dollars in debt? Save a little money for a rainy day? Our government is so far away from having an emergency fund, it’s ridiculous. Wait, I take that back. It’s just that our emergency fund speaks Chinese, or Japanese, Or Arabic. How is it that the supposed most powerful nation in the world owes so much money to many smaller countries? Is that good fiscal policy for the long run? At what point does Rome fall here? At some point in the future, our country loses it’s definition as the most powerful country in the world based on our economy. Is it at that point that we wield our influence purely by military force? That’s scary.
As you can tell, I don’t have warm fuzzy feelings about how we are doing financially as a country. I readily admit that I worry about our long term viability. I’ve often thought, what should I do? Yeah, I’m keeping a portion of my assets in cash these days, but they are in American dollars. I’ve got money spread around in some international funds, but I’m not sure how much that will do for me. If it really gets bad, all my money won’t help all of the people around me and the gated communities can only keep so many people out when it truly reaches the bottom.
What do you think? Am I nuts here? Can we just go on forever spending money that we don’t have? Is it simply that the laws of finance don’t apply to a huge economy and country like the U.S.? That brings me to my original question and the title of this post. At what point do we have to lie in our bed? When do we face the financial day of reckoning? What day do we sit down, rip up our country’s credit cards and actually build a budget that we will stick to? Is it time for the US Government to participate on the next Oprah’s Debt Diet?
Early Retirement Extreme says
Career politicians in an election year. Can’t say that I’m impressed, but that’s the way a representative democracy works. The “day” will probably be faced continuously over the next 30 years just as it has been faced for the past 30 years, but keep selling new toys to people and they don’t mind working more and more for less and less.