The ongoing discussion about the debt ceiling is getting quite interesting. The first critical date for decision was listed as May 17th, which is fast approaching. Now the date has moved to August 2nd. Geithner has stated that if we don’t raise the Federal debt ceiling by August 2nd we will not be able to pay our bills. However, some are saying that our demise is being greatly exaggerated. But we are talking about $14.294 TRILLION of debt. To make the statement that all we need to do is shift some funds around and we will be fine is a huge understatement.
I think our politicians need to call 1-800- helpme, to deal with our debt problems and help us to get on a stronger path. In our panic, the following are some steps our politicians wanted to take. All of the following involve selling off government assets to help pay down our debt, but the fact is we have more money going out than coming in which means we have not dealt with the problem. We would be giving up assets to improve an unmaintainable lifestyle. Come one gang get some help.
The first thing they wanted to do was sell off $375 billion of our gold. Although we are on what is called a fiat system, our gold reserve still helps us to maintain financial stability. The selling off of our gold reserve would devastate what little confidence there is in our current financial state.
The second thing they thought about doing was having a fire sale on the governments current level of TARP investments, which amounts to $142 billion. The financial institutions that are represented in these investments would also be hurt by selling these off. Also, the investors in these companies would lose stock value as their stock plummeted.
The last Beverly Hillbilly attempt they thought about taking was selling off the student loans currently held by the government. This equates to about $400 billion. The government would probably have to sell these at a loss which is illegal.
The total amount that could have been raised is $917 BILLION, while our debt is $14.294 TRILLION. That would be like me selling some stock worth $3000 to help deal with $30,000 in credit card debt, while I am still charging more than I can pay for. This does not make sense.
When are we going to get smart and rework the system? We need to lower government spending and raise government income. It is just that simple. And, to put it in management vernacular, it is our elected officials fiduciary responsibility to do so. When will our politicians stop being so stupid and do something?
And that is my thought for the day!