November 29th, 2010
Floyd and Mary Beth Brown, FloydReports.com
During this Christmas season of cheer and good tidings, a universal message is going forth. They are all united — from Barack Obama, to Martha Stewart, to Wall Street banks, to the Federal Reserve — and even your local mall agrees: please borrow to spend more this Christmas.
Americans since 2008 have been tightening their belts, and they have paid down more than $150 billion in consumer debt. This is a remarkable feat and a testimony to the diligence, hard work, and frugality of the American citizen. In contrast to the people, we are embarrassed that our government is encouraging irresponsible and spendthrift behavior.
Little wonder the finances of the U.S. government and the Federal Reserve are in a shambles. When times are tight, overspending and excessive debt is never the answer. Americans intuitively understand this and they are making tough choices to avoid bankruptcy. Barack Obama would be smart to follow their example.
But governments never really tighten the budget. We all learned years ago the idiocy of government accounting when they proclaimed they were making “budget cuts” when spending and borrowing was going up every year. This would be akin to us saying, “We want a Porsche, so we will cut the budget and get a Corvette,” when our salary could only cover payments on a Toyota Corolla.
This upside-down idea was in the news again this week with the bailout of Ireland….