Commentary

The Debt Bomb Boogie

Yes, this country’s financial situation is abysmal. The federal deficit is set to hit $1.7 trillion for the 2009 fiscal year, hovering around 13 percent of GDP. The Congressional Budget Office (CBO) predicts that the total federal budget could reach $13 trillion by the fall of 2010. The NY Times reported that the CBO puts Uncle Sam’s interest tab for this year’s sea of red ink at $565 billion. Man, that could almost buy another pork-riddled economic stimulus package, or fund a frivolous war in a foreign land for a few years. Meanwhile, our political leaders are dancing the “Debt Bomb Boogie.” Yes, our overpaid, over-lobbied and exceedingly selfish Congressmen and women are happily engaged in this mindless dance, edging you and I ever closer to fiscal oblivion. Oh, and hats off to the choreographer, President Obama, with his pen at the ready, eager to sign legislation that will cripple generations to come with staggering amounts of debt.

The financial crisis that erupted last fall, and the financial bailout of Wall Street that followed, provided the perfect pretext to waste hundreds of billions of borrowed dollars, allowing Congress to hand out favors behind closed doors. Every bill that is proposed in the House or Senate, from the economic stimulus package to climate control legislation, is laden with costly giveaways to special interests. This is just business as usual. Crisis always spawns another opportunity for ethically challenged politicians to loot the public coffers for private gain. Enough already!

This, by the way, is an official RANT! As our leaders pile more debt on America’s ledger, they are undermining our nation’s future economic potential, it’s reputation for fiscal responsibility, and its standing as a credible world power. The American model of crony capitalism, based upon socialized risks and personalized returns, is dead. The other nations that embraced this insidious mutation of free market capitalism, like the United Kingdom, Spain and Ireland, are suffering painful economic consequences and a decline in respect and influence – not that Spain and Ireland have much to lose in terms of international clout. (The same unpleasant things are happening to Germany and Japan; although they did not participate directly in the credit bubble and the lunacy that it spawned, they were far from innocent bystanders.)

The world order is shifting as I pound this keyboard, and it is all due to the implosion of a warped American economic ideology, one which, over the course of the past few years, led to a shocking lack of appreciation for risk, the infatuation with consumption, and the reckless accumulation of debt. If you turn an attentive ear toward Washington DC, you can hear the music, and if you close your eyes, you can imagine our elected officials dancing madly, doing the “Debt Bomb Boogie.” This is the nasty number that got us into this mess – when will we turn their music off and force them to honestly address the problems we now face?

I have listed a few good articles that I found this week. Enjoy.

Debt Burden Quickens Power Shift as G-8 Loses Clout

Staggering Budget Gap and a Reluctance to Fill It

Insight: Reservations about the dollar

Big Banks Don’t Want California’s IOUs

Power of Stimulus Slow to Take Hold

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