The Congressional debt Ceiling Fight – Chapter 793

I guess it’s fair to say that Congressional antics have superseded Casey Anthony as the fiasco du jour.  While I have great respect for the importance of freedom of the press, I have to wonder whether the current financial issues would unfold the same if there weren’t reporters and camera operators around every corner in Washington, DC.  Heaven knows we don’t want Congress working behind closed doors, but it’s almost as bad to give them an audience.

The motto of the United States may be “In God We Trust,” but the motto of our Congress seems to be, “Look at me!  Look at me!”

It’s kind of like the old joke that gives the most common quotes before a car crash, alledgedly in chronological order:

  1. Hold my beer!
  2. Watch this!
  3. Oh, shit!

We seem to have moving from the second to the third in rapid fashion.

When we were kids, we often demanded that our parents “Look at me” as we showed them our amazing new swimming maneuver or bicycle trick.  I call them amazing because they were amazing to us, not to our parents.  Fortunately most of us grew up.

I believe in life there are people who actually accomplish things and then there are people who talk about them.  This has led to such iconic sayings as “Those who can, do.  Those who can’t, teach.”  It might be more appropriate to say those who can’t legislate.  In the movie “1776” John Adams bemoans the fact “One useless man is a disgrace, two are called a law firm and three or more become a congress.”

Many businesses fail because they focus on the cost side of the business equation.  Cutting costs is attractive because if you cut $100 the bottom line increases by $100.  It is sometimes necessary but usually a lazy way out with long term repercussions.  In business the costs they tend to cut are marketing, research and development and people.  When the economy turns around the company has weakened its market position, has no new products to offer, and has to assemble a new team and get the new people up to speed.  Many times the company does not return to its previous level of success. 

On the other hand, successful companies often focus on increasing revenues.  It’s not as easy because if you increase sales by $100 the bottom line may only increase by a few dollars.  However, long term it works.  Maybe this is why the Sacramento Business Journal has an article the “Apple Has More Cash Than Treasury.”  New products customers are anxious to see and buy at premium pricing is its hallmark.  Apple has clearly focused on the revenue side of the equation.

At the risk of repeating myself, here’s my recommendations:

  1. The government’s primary revenue stream is from taxes.  People pay taxes on their incomes.  Most of us derive our income from our jobs.  Therefore employment is a key requirement.
  2. Corporations also are expected to pay tax on income, but some such as General Electric do not.  Part of this is based on the logic that companies will create jobs if they have excess funds.  Every parent knows that when you promise your kids a treat if they perform a chore, the chance of the chore being done if the treat is given first is non-existent.  Maybe we should reward corporations for the jobs they create after they create them.
  3. In the past when the government needed money they sold War Bonds and Savings Stamps.  Might be a good idea to recycle that idea and offer a better rate of return than the modest return on savings accounts – say prime + 2%.

This problem, like all problems is solvable.  Of course the first criteria is that one has to actually WANT to solve it.


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