Friday, July 29, 2011

Unrelated stories tied together by the thinnest of strings...

When I first got out of college and went to work in San Diego I worked for the Devil. Oh was Devlin. Sorry. I worked for a man named Devlin. He had bought out the man he worked for and was now the owner of a large established wholesale pottery company. The problem was he was not interested in running the company. He was interested in traveling and driving his convertible around San Diego picking up women and flashing a lot of money and basically being a big shot. You can only do that for so long before your business suffers and you end up with less money than you need. He had reached this point while I was working for him.

Now one of his favorite things to do was to take his credit card statement every month when it came in and have me dispute all of the charges. Every. Single. One. This meant (at the time) filling out a form and faxing it to the credit company for every charge he wanted to dispute. What this would do is remove them from his credit balance while the charge was in dispute so he could continue to charge without getting an increase on his credit limit. Also if he was very lucky a company would drop the charge rather than provide proof that he had authorized the charge. Now he knew and I knew and the credit card company knew that he had authorized these charges. He had decided to spend the money, spent the money, enjoyed the goods or services and was now being a dick about paying for them. See? Devil, Devlin...pretty damn close.

Next story...

You all know I grew up poor. We didn't have a lot of extras, we didn't take vacations, we wore clothes bought at the DAV (second hand shop) I've seen the repo man when he comes to take your stuff. You also know I went to a private middle school. Which means tuition. Dad had two jobs, mom worked, Jeff worked and the school worked with us to establish payments instead of asking for it all up front. When it came time for me to be able to drive my parents found a cheap used car but to be able to put gas in it and insure it and to pay for any repairs that meant a job for me. I also had to pick up some slack in the schedules. I had to pick up dad from the labs and take him to mom's work when he got off work, I had to pick up my nephew from daycare and take him to my brother and sister's house and watch him until they got off of work.

Responsibility came with owning the car. I had to pay for the extra expense it would add by taking on a weekend job and I had to help bridge the gaps that other people were responsible for already. But I loved that car and it was completely worth it.

So now if I were to tell you that those two stories were tied together you would have a hard time following how right? The only thing that is the same in them is that they are about money and they happened in my life. Ah, but you are all very smart and realize that they also tie neatly with what is happening in Washington right now. Debt ceiling and budget talks. Two things that really are not tied but have been tied together lately as well.

Let's be really clear to start since apparently not even all of our elected officials (including one running for president FFS) understand what the debt ceiling is about. We've already spent that money. The debt ceiling is all about paying back what we already owe. There shouldn't be a dispute now about it, it's done. It's like Devlin making me dispute charges that he knew were valid. Let me say it again...we've already spent that money, we are talking about our RESPONSIBILITY to pay it back while maintaining our obligations.

Now on to the budget talks. People want things fixed and I do to. How did we get into such a bind that we need to raise the debt ceiling by such a large amount? Simple math. We spent more than we made. The way a government makes money is by collecting taxes. If you need more money you go get another job or you get a raise. The way a government gets more money is by another tax or an increase in taxes. So I am going to break it down again in very very simple terms. There are a lot of points that can be argued but I don't want to argue. I just want it stopped and fixed.

Reagan raised taxes. Bush the elder raised taxes (during a recession by the way), Clinton raised taxes. All of this increased the amount of money coming in to the government. Part of why they all raised taxes was because our deficit was growing. The shortfall that happens when your goes outs are more than your comes ins. Then a funny thing happened. Our comes ins were predicted to out pace our goes outs. Wow...yay! A big part of the lesser expenses was due to the ending of the Cold War. Who would have ever known how expensive a Cold War could be? So then we got Bush the younger. And he took a look and said, Well if our comes ins are bigger than our goes outs seems like we should send some of the comes ins back. In theory I don't have an issue with this. If the budget is balanced, well and truly balanced, then you shouldn't collect extra money. Sure, cut taxes.

But here is where it falls apart. When you take away the revenue from taxes to end surpluses in the budget then you have to be able to add the revenue back in when you have a deficit. In other words, you cannot then add the expense of two wars and the prescription drug benefit into the budget and expect it to still be okay. It wasn't. Now our goes outs are WAY more than our comes ins. And our next issue hit. Our economy tanked. Less people working means less people paying taxes AND more people collecting unemployment. That's a hit on both sides.

Add to that the stimulus money that Bush and Obama spent to try and head off worse issues. Did it work? Hard to say, but it's gone, spent. So now we are looking at commitments to pay out over then next few years and we are looking at the money we have to pay it and we are seeing that gap grow larger and larger. The debt ceiling needs raised right now to ensure we can pay for what we've already spent and we need to fix our budget issues so that we can get out of this mess.

So Congress has tied them together and now we are staring down the barrel of defaulting on our payments. If you default on your credit card payment for a month or two what happens? They raise your interest rate. If the US defaults on it's obligations our credit score gets downgraded and our interest rates go up. OUR interest rates. The one you pay on your college loans, mortgage, car loan, credit card loan, business's all based off of a base rate. WE pay. All of us. Not some "them" in Washington. You and me, baby.

The debt ceiling needs raised to pay for what we've already bought. End of.

Now...budget talks...the only way to stop a hole from getting deeper is to stop digging. We all can agree to that. So cuts are needed in what we are sending out. We spend too much. We spend too much in a lot of areas. Cut costs. Some of them are going to be painful but the burden should be shared equally. So that stops the hole from getting deeper, but the only way to fill the hole is with more dirt. That means higher taxes. Sorry, but sometimes you just have to pay the piper. It's time. Those last round of tax cuts that happened because we had predicted surpluses? We don't have those anymore so those tax cuts should go away. If we right the ship, if the hole fills back up, if we pay our debts and face our obligations, then we get to revisit that benefit.

But for some reason a lot of people including a lot of those in Washington can't seem to understand this simple concept. The best way to tackle a big problem like we have is to take bites at it from each side. Everyone gives, everyone gets, it's called compromise. It's how our system is designed to work. Wonder why we don't have one party? Because we are all about the checks and balances. When we get true bipartisan bills going then we get true answers. Stop with the "if I don't get my way I am taking my marbles and going home" bullshit. Stop putting debt plans and bills through that you know won't pass because they aren't balanced, they are one sided. Stop arguing and start fixing.

And for those of you reading this who are just as stuck on your side as those in Washington are, take a step back. Look at what you do in your own house to clean up a mess. In your own business. Cutting costs AND increasing revenues. It's what is needed. Just get it done.

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