There is wasteful spending, the sinful fact, and wasteful spending the political crime.
I’ll show you what I mean:
Private Company 1, the Responsible Path: When revenues start to fall the good business owner will quickly re-evaluate his on-going expenses, from overhead expenses to labor to his wife’s new Lexus being paid out of petty cash. The good company will adjust quickly in order to stay in business, and the really good company will either 1) send the Lexus back to the dealer or 2) tell the wife she needs to start waiting table three nights a week down at Hooters’ to keep up the payments.
Bottom line: To stay afloat the budget has to balance, so the responsible business either 1) reduces spending or 2) increases revenue by moonlighting, or finding new customers or products.
This isn’t rocket science. Every household does it…that survives.
Private Company 2: The Sinful Path: Many companies start out with a heavy front end injection in cash, possibly from a government loan, or a nice start-up from family; a personal loan, or an inheritance.
This is the most common source of business failure, the enterprise often dead from the beginning, only, with millions involved, it can take a long time for this to be revealed. At the high end, Solyndra may be this sort of company, and at the low end there is Rick’s Food Mart, which was a chain of convenience stores started by a wastrel brother of a successful restauranteur I knew. Rick lived life large for about 7 years before he finally took himself, and his brother, under. I’ve had other clients like this, where their revenues never could match the opulent life style, which began long before the first contract was delivered.
Bottom Line: This sort of company almost always end up in bankruptcy, or in the East River with a cement overcoat, depending on who they pressed for the start-up capital.
Of the two types, which does Greece most remind you of?
Greece entered the European Union in just 2000, with a set of books that appeared financially responsible. They were solvent. Today, eleven years later, Greece has an annual GDP of USD 310B, and a debt of $465B, and current deficit of USD 35B, both of which have tripled since 2000. And most of this debt is in what they owe their state employees, teachers, and clerical workers, etc. and their retirement packages, both now, and in the future.
Greece got all these great benefits for itself since 2000, from loans by the European Union.
As a business Greece doesn’t really have much on the revenue side. It has a maritime industry, but you can set your watch with what they earn. Annual revenues are as predictable as the swallows at Capistrano. And they have tourism, which, ironically, their public servants have run off because so many of them have chosen to take days off and riot.
So, with revenues more or less set into stone, they have no way to really increase revenues to cover the annual deficit between “sales” and expenses. They can’t even raise taxes, as the private sector side of the country is tapped out.
What to do, what to do?
With things as stark as this, you’d think they’d make adjustments on the expense side of the ledger. But no, this is Europe, so instead, after three rounds of loan restructuring with the few European Union partners who actually have money, it has been decided that Greece is well, too Greek to fail.
Knowing this, Greece has yet to cut one single thing from their budget. They have not reduced the national budget, nor laid off state workers. Nor have they cut payrolls. Nor benefits, current or future. They haven’t even asked Scott Walker to come over and show them how this might be done.
Instead of Europe holding Greece in thrall, Greece holds Europe by the short and curlies, as a kind of extortion, saying “As we go, so shall you go.”
OK, you know how this ends, and to be honest, nobody in America cares. Or should.
But Greece is precisely where the United States government is also, only we’re on a much grander scale, for we have so much more to lose than the Acropolis and a bunch of nude beaches. These things, we cannot allow to burn.
Without forcing me to re- recite all the details as to how Greece refuses to cut spending or any of their budgets, let me just say that every Democrat Party offering, especially the President’s “Job’s Plan” is based on increasing revenues by raising taxes, after having reduced revenues by reducing the size of the private sector work force by 20%.
Like a broken record, they say a tax increase on the wealthiest of Americans is the best way to fix “our deficit” problem, and in the President’s job plans it is to pay for $465B (that will go exclusively to union and the public sector, a Happy Pappy program) that were supposed to be paid for out of the $850B Stimulus three years ago.
You already know this.
These are all lies, and they are now criminal in my view.
Wasteful spending, the crime
The Administration and Democrat Congressional officials refuse to even address cutting spending or programs in order to pay for this program, or to consider attempting to balance the books.
That is only part of the crime. The rest of the crime is that no one is forcing them to. Senate and House Republicans seem willing to play along with this lie as if it were a serious plan. And they seem willing to play the game on a playing field erected entirely of these lies.
They are playing the Democrats’ game, just as Greece is forcing the EU to play its game.
The sinful fact of wasteful spending becomes manifest when you have to hand your property over to a receiver to manage and dissolve it. Greece, Rick’s.
The criminal fact of wasteful spending becomes manifest when you try to manufacture new income by stealing it in order to allow you to maintain your wasteful practices. Obama, Democrats
The conservative candidates can change the tone of this debate. They need to be more forceful in highlighting not only the broad themes of cutting waste, but the nit-picking themes of targeted cuts in the size and scope of government.
This is leadership, for if they will lead, the Congress will follow.
Or we’ll get a Congress that will.