On March 1st the dreaded sequester went into effect and despite political brinksmanship comprised of political campaign style ads and forecasts of gloom and doom we have awoken to find that airplanes are not falling from the skies, our nation’s borders have not become any more porous than they have been and the national parks remain open.
There will be some belt tightening required and this is not a bad idea. When I use a credit card I pay the bill and any interest I incur is also paid. America has to borrow money to continue to pay for the bills incurred by the federal government. Unfortunately much of this borrowing comes from the Peoples Republic of China. This then makes China one of the credit cards that the United States is using to pay for what the government is providing. When a person in the private sector maxes out his card, borrowing is over and the individual is faced with a huge debt and a large interest payment that must be paid. When the United States is at the top of its ability to borrow it either prints more money which will eventually lead to inflation and the loss of international confidence with the dollar or it will raise the dept ceiling which allows the government to borrow more money. This is a road to disaster since the interest payment is becoming larger and larger. A person that acquires so much debt that there is no way possible to pay off what is owed to the creditors, the borrower may opt to declare bankruptcy. Today this is not an option for the United States, so our country continually raises the dept ceiling and what must be paid by our children and grand children is staggering. If in the future the United States decides to default on its debt obligations, the same as bankruptcy, we would witness a financial loss in confidence in the United States that would vibrate through the world and lead to a financial collapse of the world.
The sequester was established two years ago to put into place automatic cuts in federal programs if the federal government was unable to agree on certain financial limits. After two years the financial reductions had not been approved so the automatic cuts went into place. There will be some pain in certain sectors but not to the panic mongering televised speeches that was aired recently. If we cannot operate with a 2.4% decrease in spending then we need to place the leadership into office that is able to operate in the “new norm”. It is unfortunate that an automatic cut must go into effect without an agreement within congress on how to handle our out-of-control spending. What is even more alarming is a method of how Washington is operating today, It seems like key decisions are being made with an understanding that the problems will be solved at a future date. Then when the date arrives for the solution, the people that got what they wanted in the past do not have any solutions and instead of admitting their failure they deny that any agreement had been made. This is called kicking the can down the road. Well, its time to stop kicking and its time to stand tall, address the problems and solve the problems that we face today and not burden the future generations of our great country. Perhaps if our Federal Government would take the lead of our local mayors, our state and many of our other successful state governments and learn to live within its means we can divert a financial holocaust.


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