Money Matters: Fixing America's Financial Mess
As Democrats and Republicans duke it out over America's national debt, it grows at a rate of $200 million an hour; standing at $17 trillion and counting. House Speaker John Boehner is ready to fight, promising "a whale of a fight" over raising the debt limit. How does politics, fighting over money and political posturing affect us? Think of it as a TKO (technical knockout) by either Mohammed Ali or Floyd Mayweather.
While the Federal Reserve continues their cavalier appetite for manipulating the US dollar, it's value globally is shrinking faster than the Italians can pull the Costa Concordia to dry land. Recently, a USA Today Opinion piece cited two groups owning 96% of America's debt: Investors and the Federal Reserve itself.
Why should this matter to average Americans? Whoever controls debt control everything!
Currently, America is only authorized to print its money: other countries are restricted from printing US currency. Therefore, as we print more its worth less: to us and other nations too. That means interest rates (%) on things we routinely purchased scores, each US dollar spent is worth less on global markets, and this triggers a domino effect for those seeking American goods and services. This overt flawed national strategy torpedoes America's ability to attract investors; indeed, it affects our ability stay competitive globally, thereby buying products here at affordable rates. Getting a grip on this grim picture?
Consider this: When's the last time you used ca$h to purchase anything? We don't even use it buy a $4 Starbucks latte'. Americans have gradually phased out using ca$h as the Feds continue their egregious policies of printing--and manipulates--our money. This practice has caused America's credit standing to suffer globally. It may generations to recover. During this impasse, countries like China, India and North Korea, et.al. are loving it. As Americans have become blissfully hooked on "living large and beyond our means', they tighten-the-purse-strings on America's borrowing limits.
Warren Buffet summaries it this way: "There's a class warfare, all right, but it's my class, the rich class, that's making war, and we're not winning."
So, what can "Joe Public" do? Below are several modest suggestions:
1) Start using "hard ca$h", instead of credit, to pay for things;
2) Take that stored-up annual, sick and vacation leave accrued at work and use it;
3) Buy-down, make large down-payments, on all future purchase; and,
4) Call each Representative - Federal, State, Local - say "If I don't see a major shift in our money policies, you won't see my vote next time." On average, each Congressional Representative receives $174,000 annually. Health insurance, for life, is free. (Affordable Health (Obama) Care is for us). Somewhat ironically, only 1 in 4 (25%) have a college degree. This compares to 3 of 4 (75%) for all Americans holding degrees nationwide. Hence, the average American works for a living, and fights for health-care to live.
( http://library.clerk.house.gov/reference-files/113_20130124_Salary.pdf Congressional Research Service, January 15, 2013)
Finally, don't point fingers, or getting caught-up splitting hairs over whether or not Congress should raise America's borrowing limits. That's not the problem. Americans are grand masters at "robbing Peter to pay Paul'. What's citizens must do now is to fire-up Congress by engaging in a full-court press forcing them to agree and act swiftly and decisively on a permanent monetary strategy for the country. Otherwise, expect the "tail to wag the dog' into piles of worthless paper and, regrettably, us too.
Ronald Arrington, MBA, Consultants, Trainers, Coaches, North America and Canada