The Dance No Ones to See

Responsible people tend to approach “financial cliffs” quite cautiously. When a family sits down and realizes they might not have a full food budget at the end of the month, it initiates a change in their combined behavior as a unit. Maybe the parent’s say that on Tuesday they don’t do early dining with the Smith’s? You eat pasta at home. They wash their own car. When a family sees a tuition bill coming up in 3 months, they either cut spending, borrow from family members, or ask the school for a deference. They don’t wait until the last minute,

In almost any situation, families and individuals figure it out. They also keep it quiet. They don’t want their neighbors, friends and so forth to know they are tight right now. They show some dignity.

Since 1960, Congress has raised the ceiling 78 times. For the last 30 years of my professional career, I have watched most of them. I have always had a tremendous interest in how the Congress/The Executive Branch Acts and the “right’s” they have. I write “rights” as it for me it’s an unnecessary reminder and simple look at the Unambiguity Nature of the Constitution and figure it out. But to them, “right’s” become something more – it’s like they came out Woodstock on mushrooms and just started blabbering. Crazy ideas pop. “Solutions” that are like shiny pennies.  I have witnessed and watched countless of these shows.

You wake up in the morning and see headlines like this:

Debt-Ceiling Fight Comes Down to Spending: Freeze or Cut? - WSJ

It’s a show of posturing, looking at themselves in the mirrors, endless speeches about “stick to need, goals” or “responsibility and discipline”. It’s on both sides of the aisle. It also hasn’t really mattered who was in power, just the actors, and some timing issues of when it came up.

It’s a pathetic lack of leadership and a constant self-inflicted “crisis” they create. Enough. Enough. Enough.

To anyone who gets the realities, the story ends the same way. Some “deal” with both sides claiming success. Right up to the deadline and then begins the analysis by economists and investors on what it means. To them as financial investors, but real people don’t always understand see the dirty sausage process. They get sold on it was a good deal given the situation, blah, blah. It’s old and tiring.

Longer term effect:

When you are the global military superpower and “leader” in the financial world with the world’s current reserve, it presents a different picture.

The financial press and markets around the world watch and maybe give an unrealistic prospect like a dead doesn’t occur. IE, we have a Treasury default. A deal doesn’t occur. That Treasury can’t pay all their bills at the end of the month. It’s uncertainty that the financial markets don’t like.

This uncertainty has gone on too long. External investors don’t like it -it is not one that gives them comfort in the current reserve system.