"The most significant threat to our national security is our debt," Admiral Michael Mullen, Chairman, Joint Chiefs of Staff, August 27, 2010


Wednesday, July 14, 2010

Commissions, Dime Store Mirrors and Politicians

The Washington Post has been pretty supportive of the current administration. They ran a great article with a wonderful graphical illustration of the current administration's budget for fiscal year 2011 (FY 2011) – October 1, 2010 to September 30, 2011. It is must reading for all Americans who seek to understand facts about the ultimate consequences of America’s 30 year binge of fiscal promiscuity. Make sure to click on the link in the article (see below) entitled “(Graphic: President Obama’s proposed 2011 budget explained.)

The article is sober reading because it is not partisan; not political. TheFundamentals see nothing partisan or political (as in Democrat v. Republican) in the mess we have created for ourselves. Politicians may point fingers at each other but their finger pointing is misdirected. All they need are dime store mirrors held about 6 or 8 inches away from their well photographed visages to see whose fingers and fingerprints are all over the mess. By the way, dime stores were places where many of us, as kids, could go with our pennies, nickels and dimes and buy small treats that brought great joy to a youngsters being. The very thought of a dime store, even today, is a source of joy and pleasure. Dime stores had names like Kresge’s and Woolworth’s.

Back to our reality.

Here are some of the facts about Mr. Obama’s budget. By the way, this is not an inherited budget. Neither were the others but this one is all his and all the party in power (PIP.)

The revenues are projected to total about $2.567 trillion up from $2.165 trillion in FY2010. Let’s hope that it is so. Expenses (for some reason they call them “outlays”) are going to be $3.834 trillion, up from $3.721 trillion in FY2010. You know that will be so.  The resulting deficit is going to be $1.267 trillion, down from $1.556 trillion in FY2010.

You can look at the government’s detail of this budget by clicking on the following link: http://www.whitehouse.gov/omb/budget/fy2011/assets/tables.pdf   We suggest you turn the document 90 degrees in order to view it.

Back to the Washington Post and their article about fiscal promiscuity (TheFundamentals terminology), the “debt commission” designated to examine the consequences or Americas fiscal promiscuity and solutions thereto.  Some excerpts: “…the coming fiscal calamity is staring the country in the face.”This one is as clear as a bell," he said. "This debt is like a cancer." The "he" in this quote is Erskine Bowles, one of the guys heading up the commission.

"We can't grow our way out of this," Bowles said. "We could have decades of double-digit growth and not grow our way out of this enormous debt problem. We can't tax our way out.”

Let’s see now. We can’t grow our way out and we can’t tax our way out and we’ve been diagnosed with cancer which usually means drastic treatments required. So what can we do?  Well, for one thing we probably don't need to budget for a $1.267 trillion deficit in the coming year, huh?  D'oh.

But we've got this commission. TheFundamentals has two comments about the commission. One, if you have to set up a committee to deal with a problem you are not the right person(s) to deal with the problem. Two, we have an election coming up in several months. Wouldn’t it be appropriate to have the commission’s recommendations, given that there is no other leadership available (and they must involve some spending cuts given that growth and taxes cannot solve the problem alone) before the election? That way the debate leading up to the election could involve those politicians with their new dime store mirrors maybe having to take a position on something not too desirable? Makes sense to TheFundamentals. So what is their plan you ask? Deliver the recommendations after the election.  Makes you want to giggle, doesn't it?  Or cry.

This group, Party in Power (PIP) and Party out of Power (POOP) need some mirrors. Cheap, made in China mirrors.  Better yet. They need some time in the unemployment line. A lot of time.

Read the article and take a look at the graph at: http://www.washingtonpost.com/wp-dyn/content/article/2010/07/11/AR2010071101956.html

It’s good stuff.

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