A better perspective on government fiscal stupidity

The fuse is burning

Like most sensible people I often worry where the continuous overspending by all levels of government will eventually lead. Ongoing spending by Municipal, Provincial, or Federal governments seems to indicate a total lack of common sense or any fiscal responsibility on the part of our elected officials. It's almost like they live on a different world where money literally grows on trees and they function using a system of math where two plus two does not equal four. The alternative would be that they are simply stupid or incredibly naive about managing money.

Now while our Canadian Federal or Provincial governments are not by any stretch of the imagination "fiscally responsible" they do not even come close to displaying the free spending mindset and the reckless fiscal abandonment that our American neighbors to the south are engaging in, particularly at the Federal level in Washington. Watching their antics as they battle over adjusting personal tax rates higher, debt ceiling increases, and implementing spending cuts, would be comical if it was not so serious that the outcome has the ability to negatively impact the entire global economy. Even a simpleton knows that you can not continuously spend more than you take in, unfortunately this basic fact seems to be lost on America's elected officials especially the guy currently serving as President.

So if a simpleton can understand the concept, why can't supposedly bright elected officials?
Here's what I think........

One can only wonder where it will all lead....

Over the years as I have watched the world go by it has become more apparent on a daily basis that the manner in which our democracy works is at times it's own worse enemy. Although from an early age we are taught that the different levels of government exist to serve the people, unfortunately in practice it seldom works as originally intended. In reality, many basic human traits make the practical application of good government far more difficult to implement than it appears on paper. Greed, lust for power, ignorance, prejudices, and people's general inability to understand that every action has a consequence, all play a role in making perfect government only a dream that will never be achieved.

Those that "serve us" in government rely solely on the electorate process to maintain their seats of power. So our politicians have learnt well that the people's loyalty can be bought with a few baubles and trinkets. Every election brings more promises of what the electorate can expect "in payment" from each of the political candidates if they are elected. What we generally see is a bidding war for votes with every party pulling out the cheque book and removing all stops in their zeal to promise the voter more than their opponent can. The problem is compounded as the demands of the electorate and the promises of those running for office increase with each election and every generation of voters. Now on first glance, one may wonder if this is such a bad thing, after all it is taxpayers money intended to be spent for the common good and the betterment of society as a whole.

Stormy Seas Ahead?

Over the last 6 months there has been tremendous focus on the Presidential election and what it's outcome would be. Well it's old news now and President Obama has another four years to fix Americas economy or continue it on the road to no return. Like most individuals I hope it is the former , not the latter, but unfortunately the man doesn't have a great track record up to this point.

My personal feeling is that Mitt Romney was a more qualified individual and better suited for the task ahead, simply based on his past experience. President Obama walked into the Oval Office with no real life business experience, Mitt Romney on the other hand has a lifetime of practical experience  running a large corporation. Now I for one am not against a bit of  "on the job" training in most instances, but I believe that most sensible people would agree that the Whitehouse is not the ideal  place for it.

However, no point in dwelling on what might have been, the fact is that Mr Obama is back for another term, like it or not. So am I just being negative towards the guy, well lets see how others view his re-election

- The stock market took a sharp downturn Wednesday, just a day after President Obama’s re-election. The Dow Jones average dropped about 313 points, or 2.4 percent, as if my writing this it is down 4%!

- How about job creation, or maybe the real indicator is job loss. So how many Americans lost jobs since the President secured another term. Here's a short list of layoffs that have taken place on or since November 6 in about a 3 day period .

Bristol-Myers – 480 Sales Related Jobs in NJ

ING – 2,350

Husqvarna AB – 600

U.S. Cellular – 980

Energizer Holdings Inc – 1500

Ameridose LLC – up to 650 Layoffs

Pratt & Whitney Rocketdyne – 100

Boeing – 30% of Executives at Defense Unit

Hawker Beechcraft - 240

Vesta Wind Systems - 3000

Now trust me when I say the above list is but a small portion of layoff announcements I was able to find in short order, yet in just the 3 days after the election the list totals over 10,000. What confuses me is the fact that Mr Obama claimed during his campaign that he was the one that could create good paying manufacturing jobs. Seems he forgot to mention his abilities to the companies listed above. My personal belief is that the timing of these layoffs was not coincidental, they occurred right after Mr Obama's election for a very good reason. I suspect many of these companies held off on downsizing hoping beyond hope that the Oval Office would have a new tenant and Obamacare would be repealed. No such luck, so the pink slips went out. Now the count of those seeking government entitlements has increased by over 10,000, throw in the 18,500 jobs the unions killed over at Hostess and there are nearly 30,000 jobs down the pipe simply due to greed and stupidity (on both Obama's and the Unions part). Now the fact is that some of these jobs may come back if business feels a bit of confidence, but some are lost forever (i.e Hostess). But even as jobs come back Mr Obama has already laid the groundwork for a future workforce of part-time rather than full time jobs, he did this through Obamacare which defines a full-time position (for the purposes of health insurance coverage) as 30 hours per week! Think about it, the easiest way for employers to avoid the onerous costs of Obamacare is simply to hire employees on a 25 - 28 hour workweek (just shy of 30 to be safe), so Obama has just reduced the standard 40 hour workweek to 28 in his wisdom. His logic behind this is brilliant, any time the government quotes new job figures all of these part-time positions will fall into them and instead of having two (40 hour workweek positions), and assuming that employers commit to the same umber of work hours (80 per week) they will now count three (25-28 hour workweek positions) and an increase in the number of new positions of 50%! So the government looks like a hero, except of course to the guy that is short 12 hours a week on his paycheck.

Unfortunately while it seems that Mr Obama has the support of a good deal of the population who depend on government entitlements, he is not inspiring any confidence amongst the companies that create the jobs the American population is hoping for. Oops, I hope that statement didn't cause too much grief amongst those of you who are under the delusion that the President or any other politician can actually create meaningful employment, sorry I burst your bubble. All any politician can do is foster an economic and political climate that ensures that employers are confident enough to invest in creating jobs. Unfortunately, continuously bad mouthing the financially successful, and beating the drum of tax increases and additional employer costs (Obamacare) has exactly the opposite affect. I guess that's what one should expect when you have a community organizer in the Oval Office, rather than a successful businessman. Obama's roots as a community organizer are showing through, when he needs more money he just assumes the government will provide it.

Renovating the den, while he kitchen is on fire. Part 2

In Part One I discussed how our governments in both Canada and the United

States for all intents and purposes are simply ignoring the massive debts they are incurring. Sure, once in a while they pay lip service to the debt, but generally it is placed on the back burner. I detailed my thoughts on this in Part One, and since that time I have seen some classic examples of our elected officials focusing on minor issues and treating them as if they had the potential to change civilization.

Here is a real doozie!

It appears that both the American Congress and Senate are up in arms over the fact that the uniforms of the U.S. Olympic Team were manufactured in China. In fact a bill was introduced in the Senate that if passed, would require the US Olympic Committee (USOC) to outfit Olympic athletes in ceremonial uniforms "sewn or assembled in the United States."

Let me get this straight, in the midst of what could possibly be considered the second worst financial crisis in American history (a close second right after the Great Depression) and at a time when government spending is spiraling out of control, it appears that the biggest concern of these elected officials is who did the sewing for Team USA! One can only imagine what this is costing the American taxpayer to have these individuals sit around and discuss the rag trade. I'm not making this up, trust me I am not that creative to imagine such stupidity. Sure, I realize that the uniforms are just a symptom of the bigger problem, the outsourcing of American jobs. However, that horse has left the barn!

Renovating the den, while the kitchen is on fire....

With summer upon us I find that I am not devoting much time to writing on this blog, it could be that not much in the news catches my attention, or just that I would rather spend my time outside. I think it is a safe bet to go with the latter.

However, while watching the late evening news last night something did catch my eye and get me to thinking.  To be honest I don't even remember what the actual issue was, however the train of thought it put me on is important.

Lately I have noticed that more than ever both in Canada and the United States that politicians as a group are focused on a myriad of issues, yet ignore the single biggest threat to the future of both our countries. The threat?

The massive crushing debt that has been taken on by all levels of government.

While there is some 'lip service" paid to addressing the debt, little if any serious action is undertaken to tackle it. I mean really, for example neither federal government has any form of repayment planned. Each year simply slips by and the debt grows, and a myriad of excuses are given, poor economy, unexpected expenses, lower revenues, etc, etc, etc. We all know the drill

Now, part of the problem is that the average citizen is oblivious to all of this, for the vast majority they are aware to some degree that there is government debt, but simply don't see it as something that affects their life or that they need to be concerned about. There lies the sad part and the reason that there is no urgency to tackle the problem. Unfortunately politicians, better than anyone understand the adage of  "The squeaky wheel gets the grease". So if no one is complaining, why tackle the issue, after all there are only two possible ways to solve the problem, cut spending or raise more revenue (taxes). Obviously neither method garners a lots of support from the average voter who is looking to the government for all the entitlement programs they have come to view as their birthright. The sad reality of our self entitled society is that spending garners votes, not austerity. I personally believe that politicians understand the severity of the issue better than many of us give them credit for, they also understand that no one government in a single term will resolve the issue, and that more than likely the government that has the fortitude to tackle the issue will only serve one term. So their response is simple, leave it for "the next guy", and in the meantime divert the peoples focus from the real problem  by throwing them shiny baubles and trinkets.

So where will all of this lead, the answer is already playing out in Europe, in countries such as Greece and Spain. Unfortunately it is only a matter of time before North America suffers the same fate.