First let me say what I agree with. Yes, our debt is crippling. Yes, we as a nation and as individuals live beyond our means because it is unsustainable.
But this is not what caused the financial crisis. The crisis was caused by:
- Unregulated greed. Greed is one of the greatest inspirers of innovation. But we need rules to ensure that everyone plays on a level playing field.
- Imbalanced risk versus rewards. If the same person or entity that benefits from a good decision will also suffer the consequences of a bad decision, by an large, that entity does a better job at considering the risk. In the current crisis, we had mortgage brokers who got money for making loans, but suffered no consequence if they wrote a loan to someone they knew couldn't pay. The banks didn't care as long as they thought they could sell the load on the secondary market to Fannie and Freddie.
So what should we do about the current crisis. I believe we gotta come big. I believe the risk of doing too little far outweighs the risks of doing too little. I believe most people mistakenly believe that life will continue only because it has done so for their whole lives. I believe that major changes can and do happen. All great empires wane and at some point, so too will America at some point. This crisis has the signs of a cataclysmic event that could greatly change the world and our place in it, so the risks are too great. Is the Democratic plan the right one? Honestly I have no idea and don't believe that anyone really knows. Even the world class economists are just providing educated guesses based on classroom "schools of thought".
However, once the crisis is averted (fingers crossed), we must address the deficit. And I hate to say it, but we can't do that by just reducing pork/earmarks. Pork just makes up too little of the budget to make a dent. We must address, restructure or reduce:
- Social Security,
- Medicare, and
- Defense.
Without talking these three, talks about balancing the budget are meaningless.
No comments:
Post a Comment