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Tuesday, July 26, 2011

Collateral Damage. History of Debt Ceiling. Sprinkler heads.

I'm with Stupid... I think? Or are you with Stupid?  Am I stupid? 
"We can't allow the American people to become collateral damage to Washington's political warfare," Obama said.
Moments later, Boehner responded that the president "wants a blank check" to continue government spending that is "sapping the drive of our people."

Obama is definitely trying to figure out something—I will give him that, but he looks pathetic in doing so.  If the republican’s goal is to destroy Obama’s image until the last second, they seem to be doing a great job.  I highly doubt that these two clowns will fail to figure some way to keep the circus going, but I am sure it will be a band-aid fix and nothing else.  The debt ceiling debate will be in full swing again when the real dog-and-pony show, the presidential elections, start for 2012. 
As for collateral damage, I disagree with Obama’s statements.  Yes, there will be some pain if the US credit rating is downgraded, but it doesn’t mean it is time to buy guns and ammo.  Japan lost their AAA rating 10 years ago and they have very low rates and the Yen is a very strong currency.  At this point it is all politics… tick tock, tick tock politick, tock.  The clock may be ticking but this is all a charade to make Obama look worse.  Nothing else.
Maybe these guys need to do this deal the old fashioned way:  A bottle of Whiskey, a pen, a paper and a hand-gun.   
History of the Debt Ceiling…        
Here is an interesting story on Wallstreetcheatsheet.com about history of the debt ceiling.  The debt ceiling has been raised 77 times since it was put into place.  This story puts some perspective on how much of a puppet show this really is.

In fact, the debt ceiling has already been increase three times during Obama’s presidency, twice in 2009 and once in 2010 when both the House and Senate were led by Democrats.

During President George W. Bush’s two terms in office, the debt ceiling was raised 7 times, the first time by a Republican-led House and a Democrat-led Senate in June 2002, the second with a Republican majority in both houses less than a year later, and the final time by a Democratic majority in both houses in November 2008. During Bush’s tenure, the debt ceiling was increased from $5.95 trillion to $11.315 trillion.

Bush’s 8 years doubled the debt ceiling and Obama has already maxed out the $14.3 trillion line. 

The real question that needs asked is, ‘Why is there a debt ceiling if there is no intention to EVER pay it back?”

Does anyone ever see us paying this back?  I suppose in 30 years when all the baby boomers finally die after receiving Social Security for 3 decades we may have a chance, but in reality there is no feasible way we can pay back this debt.

Default or Pay it down.

If you or I was to get into a situation where we had borrowed too much money we would have to come to some conclusions about how we planned on structuring our current finances.  Do you Default (personal bankruptcy) or do you pay it down (sacrifices to your current life style)? 

This is really an easy situation when presented this way.  If America has raised the debt limit from $5.95 Trillion to over $14.3 Trillion in the last 10 years, there is NO WAY they can change the way they are spending… the obvious answer would be default, or bankruptcy, for a consumer.  Somehow, in some way, you have to get spending in control.

The answer cannot always be to print more money (sorry Ben Wizzie).

Sprinkler Heads. 

I moved into a house in 2009 (foreclosure that sold for a 27% discount from the previous sale 2 years prior) and had a big problem with the sprinkler system. 

I had one guy that recommended replacing the whole sprinkler system—tearing out all the lines and rerunning the system so it was more efficient and effective.  All this for a cool $4000. 

I suppose this was an option, but the thing about options is that you have a few to choose from.  We concluded that it wasn’t the sprinkler system that was broken, but the sprinkler heads that needed updated and replaced.  The Home Depot carries these for about $4 each.  At 10 heads, the cost to replace the heads is a 90% discount to replacing the entire sprinkler system.
What did I learn from this? 

A system is not always broken, even though it seems to be working improperly.  Sometimes all you need to do is change out the heads.

Going Back in Time...

- Sen. Barack Obama (D-IL), March 20, 2006
The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.”
I think the government could learn a lot from my sprinker story…  

BONUS MATERIAL!!! For your visual enjoyment-- $15 trillion in pictures!  Great site! http://www.wtfnoway.com/

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