Thursday, January 8, 2009

No Mo' Money

Just as Obama is warning of future years of trillion dollar deficits, and Nancy and Harry are salivating over the prospect of spending more money that we don't have, China has indicated through its economic policies over the past two weeks that it's appetite for buying up US debt is fading fast. So who then is going to buy up all the debt that our government is intent on amassing? The actions of our leaders are reminiscent of a college kid with their first credit card, cluelessly buying cool clothes and partying away, without thinking about the reckoning that awaits.

I'm confused. FDR's big spending on infrastructure did not push the US out of the Depression. Instead, it was a host of other factors, most notably the involvement of the US in WWII, which finally propelled the country out of it's long financial drought. The tax rebates of last spring which put a little spending money in people's pockets, did not curtail the current recession. The $700 billion bailout along with all of the other billions recently spent on nationalizing private businesses, has not had the expected effect of minimizing the pain. So what makes Obama and the Democrats think that doing more of the same is going to do anything more than dig us into a deeper hole? A hole which may be impossible to dig ourselves out of without the aid of Chinese willingness to hold our debt?

This all seems like nothing more than the bad policy of reckless spending and denial which caused the housing bust, but on a much larger scale. Unfortunately, the ramifications could be far more ominous. The US can print more money, but that will only diminish the value of the dollar. If our debtors call in the chips, and the dollar becomes more and more worthless, where does that leave us? It seems like in lean times, it might be worth considering cutting out every bit of fat in the budget. Take the medicine now and stave off a full blown potentially lethal infection later. The problem is that a fiscal conservative's view of wants is a liberal's view of needs. Do we really need to fund cutting edge gyms in prisons, housing for illegal immigrants, private jumbo jets and expensive junkets for members of Congress, and cappuccino makers in schools, when we have NO money? Someone always comes up with an argument why some bit of unnecessary spending should continue, or why some new spending should be initiated. When will they just say "No"? I'll tell you when; when it's too late. When we are in such bad shape that the country becomes like a dying elephant and the scavengers around the globe come and pick our bones. Then people will demand accountability from their leaders.

What scares me is that the people who should know this stuff don't seem to be doing anything to change the direction of our impending wreck.


DanJ said...

Tremendous post, Mad Mom. If Obama wanted the best for the country, he'd be talking about wealth-creation, not wealth redistribution.

Will the economy grow by taking money away from people who are good at producing wealth and handing it out to the ones who aren't?

Mad Mom said...

Sounds like that's the plan, DanJ. And that's why we're going to circle the drain if we cannot thwart the liberal spending agenda. The irony is that, in the end, this guy is going to take down everyone with his misguided policies, not just the productive in society.

Anonymous said...

Just found this blog, saw this today and it seems to fit for a reply to DanJ

To All My Valued Employees

There have been some rumblings around the office about the future of this company, and more specifically, your job. As you know, the economy has changed for the worse and presents many challenges. However, the good news is this: The economy doesn't pose a threat to your job. What does threaten your job however, is the changing political landscape in this country.
However, let me tell you some little tidbits of fact which might help you decide what is in your best interests.

First, while it is easy to spew rhetoric that casts employers against employees, you have to understand that for every business owner there is a Back Story. This back story is often neglected and overshadowed by what you see and hear. Sure, you see me park my Mercedes outside. You've seen my big home at last years Christmas party. I'm sure all these flashy icons of luxury conjure up some idealized thoughts about my life.

However, what you don't see is the BACK STORY:

I started this company 28 years ago. At that time, I lived in a 300 square foot studio apartment for 3 years. My entire living apartment was converted into an office so I could put forth 100% effort into building a company, which by the way, would eventually employ you.

My diet consisted of Ramen Pride noodles because every dollar I spent went back into this company. I drove a rusty Toyota Corolla with a defective transmission. I didn't have time to date. Often times, I stayed home on weekends, while my friends went out drinking and partying. In fact, I was married to my business -- hard work, discipline, and sacrifice.

Meanwhile, my friends got jobs. They worked 40 hours a week and made a modest $50K a year and spent every dime they earned. They drove flashy cars and lived in expensive homes and wore fancy designer clothes. Instead of hitting the Nordstrom's for the latest hot fashion item, I was trolling through the discount store extracting any clothing item that didn't look like it was birthed in the 70's. My friends refinanced their mortgages and lived a life of luxury. I, however, did not. I put my time, my money, and my life into a business with a vision that eventually, some day, I too, will be able to afford these luxuries my friends supposedly had.

So, while you physically arrive at the office at 9am, mentally check in at about noon, and then leave at 5pm, I don't. There is no "off" button for me. When you leave the office, you are done and you have a weekend all to yourself. I unfortunately do not have the freedom. I eat, and breathe this company every minute of the day. There is no rest. There is no weekend. There is no happy hour. Every day this business is attached to my hip like a 1 year old special-needs child. You, of course, only see the fruits of that garden -- the nice house, the Mercedes, the vacations... you never realize the Back Story and the sacrifices I've made.

Now, the economy is falling apart and I, the guy that made all the right decisions and saved his money, have to bail-out all the people who didn't. The people that overspent their paychecks suddenly feel entitled to the same luxuries that I earned and sacrificed a decade of my life for.

Yes, business ownership has its benefits but the price I've paid is steep and not without wounds.

Unfortunately, the cost of running this business, and employing you, is starting to eclipse the threshold of marginal benefit and let me tell you why:

I am being taxed to death and the government thinks I don't pay enough. I have state taxes. Federal taxes. Property taxes. Sales and use taxes. Payroll taxes. Workers compensation taxes. Unemployment taxes. Taxes on taxes. I have to hire a tax man to manage all these taxes and then guess what? I have to pay taxes for employing him. Government mandates and regulations and all the accounting that goes with it, now occupy most of my time. On Oct 15th, I wrote a check to the US Treasury for $288,000 for quarterly taxes. You know what my "stimulus" check was? Zero.. Nada. Zilch.

The question I have is this: Who is stimulating the economy? Me, the guy who has provided 14 people good paying jobs and serves over 2,200,000 people per year with a flourishing business? Or, the single mother sitting at home pregnant with her fourth child waiting for her next welfare check? Obviously, government feels the latter is the economic stimulus of this country.

The fact is, if I deducted (Read: Stole) 50% of your paycheck you'd quit and you wouldn't work here. I mean, why should you? That's nuts. Who wants to get rewarded only 50% of their hard work? Well, I agree which is why your job is in jeopardy.

Here is what many of you don't understand ... to stimulate the economy you need to stimulate what runs the economy. Had suddenly government mandated to me that I didn't need to pay taxes, guess what? Instead of depositing that $288,000 into the Washington black-hole, I would have spent it, hired more employees, and generated substantial economic growth. My employees would have enjoyed the wealth of that tax cut in the form of promotions and better salaries. But you can forget it now.

When you have a comatose man on the verge of death, you don't defibrillate and shock his thumb thinking that will bring him back to life, do you? Or, do you defibrillate his heart? Business is at the heart of America and always has been. To restart it, you must stimulate it, not kill it. Suddenly, the power brokers in Washington believe the poor of America are the essential drivers of the American economic engine. Nothing could be further from the truth and this is the type of change you can keep.

So where am I going with all this?

It's quite simple.

If any new taxes are levied on me, or my company, my reaction will be swift and simple. I'll fire you. I'll fire your co-workers. You can then plead with the government to pay for your mortgage, your SUV, and your child's future. Frankly, it isn't my problem any more.

Then, I will close this company down, move to another country, and retire. You see, I'm done. I'm done with a country that penalizes the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed, and with it, will be my citizenship.

So, if you lose your job, it won't be at the hands of the economy; it will be at the hands of a political hurricane that swept through this country, steamrolled the constitution, and will have changed its landscape forever. If that happens, you can find me sitting on a beach, retired, and with no employees to worry about....

Signed, THE BOSS

Mad Mom said...

Amen, Boss. Well said. It's too bad the idiots in Washington have never had to exerience the kind of sacrifice you speak of, nor do they care. You are the engine of the economy, and they want to run you dry. It's unfortunate that people are too ignorant or lazy to understand the basic premise that America was founded on the belief that we have the freedom to make of our lives what we may through our own endeavors, and not by relying on the government to provide all of our needs. What has made this country the greatest on earth is in great danger of being extinguished forever. I'll be on the beach with you, and we'll toast the politicians and ignorant masses looking for the easy way. And then we'll laugh when they realize that they got it all wrong.

John said...

Mad Mom,

We vote in and pay our legislators for solutions and protection. We are hurting big time on BOTH fronts. I am getting “killed”.

The bloggers just blog....they offer no real articulate and well-thought-out detailed alternatives that I can see.

In business, companies need to define the policy, then the strategy, then the tactics, then the detailed processes to implement change solutions so as to more succinctly insure success. Yes, that's hard work and takes time but with it comes more confidence that changes will work or not.

Mad Mom, where/who are the people that do this hard work in government? It seems that government doesn't do these things at all or certainly not very well. How can we identify and improve on that?

Mad Mom said...

I think the issue is so big, unprecendented, complicated and
unpredictable because it's linked with a global economy and a bunch of other countries making decisions over which we have no control, some of whom are antagonistic, and all with their own best interests in mind.
So even economists can't agree on a solution. I would create a brain trust of the best business minds and have them come up with something viable, and then
implement it. Obama has this big cadre of economic advisers, but in spite of all that alleged brain power, his ideas seem to be the same old, same old democratic spending. Maybe he should just get a bunch of mothers who run efficient households and have
them figure it out, because the politicians and big brains don't seem to have a bloody clue.