Thursday, October 1, 2009

My View

Random thoughts from a warped and fevered mind...

The news that the Penske purchase of the Saturn division of General Motors is now a no-go is very troubling on several levels. There are the remaining approximately 1300 jobs that will be lost when the plant closes for good in November. There is also the loss of the ancillary jobs that were held by suppliers and logistics firms. These job losses will ripple through our local economy in a very negative way, impacting numerous families and businesses. The demise of "a different kind of car company" will be analyzed for years to come. Perhaps if it were truly different, GM would not have been compelled to shut it down.

I once went to a general store, but they wouldn't let me buy anything specifically.

A lot of focus right now is on the debt level of the federal government and the growth of that debt. Frankly, it is alarming when one truly considers the size of the federal deficit. A fundamental question one might ask when considering this debt is "Why doesn't the government just cut spending?" The reality, according to Bruce Bartlett, former Treasury Department economist, is that 62% of all government spending is MANDATORY! This mandatory spending is used to pay interest on the existing debt and pay entitlement programs such as welfare or social security. Of the remaining 32% of annual spending, the majority is spent for national defense, leaving $485 billion for everything else. The 2008 budget deficit was $459 billion. That means a balanced budget would require the elimination of virtually every single domestic program- social programs, road and infrastructure programs, air traffic control, and the FBI, just to name a few. Now we get an understanding of the intractability of this problem and the reluctance of politicians of all stripe to face it.

I have never liked camping. Too in-tents

2019. Keep that date in mind. That is the year that the Congressional Budget Office says we will borrow (read: sell Treasury Bills and Notes to the public and other nations) just to pay the interest on our debt. None of our borrowings at that time will be used for other purposes. National debt is projected to rise by 2019 to 67.8% of our GDP. The warning signs are flashing, the sirens are sounding. It will be interesting to see if we have the fortitude and honesty to deal with what could be a looming financial disaster for our country.

I don't suffer from insanity- I enjoy every minute of it.

And that, my friends, is my view.

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