A quest to make sense of it all. Or a sense to make a quest of it all.

Thursday, July 28, 2011

Audacity.

I'm no real financial advisor. Sure, I can help you figure out what kind of account is best for you. We can look at CDs versus High Yield Money Markets, and I can analyze your needs and tell you how you'll make the most money off the money you already own. I can calculate your interest over time so you'll know what your $30,000 today will be in five years. I can help you understand the rules so you can keep as much of your hard-earned money as possible without it being unnecessarily taxed to death.

But I'm no guru. I can't comfortably sit down and talk shop with the Investments boys yet. It would be unethical and illegal for me to advise you on stocks. It's fair to say I know a little more about the financial world than many of my peers. Just a little, though. And having intimate knowledge of HYMMs is a damn far shout from being able to weigh in on the current debt ceiling crisis with any kind of of authority.

But I can say that the suggestions in this article are pretty insulting, and I can say that it's a pretty shitty situation when SSI-dependent 80 year olds are being asked to cut off their phone service and shower less frequently because our fine leaders (most of whom are in the top tax brackets) apparently can't be expected to stick to a budget themselves.

7 comments:

Foz the Hook said...

Sarah,

While we see eye to eye on many things, and while we certainly agree that watching the current political farce being played out in Washington is most aggravating, I cannot agree with the proposition that "our fine leaders... apparently can't be expected to stick to a budget themselves."

The current crisis surrounding raising the debt ceiling is not part of the issue of balancing the national budget, and I feel that those politicians who have managed to portray it that way are not speaking in good faith. The issue is not about the government living within its means, the issue is about making good on obligations we have already incurred.

I recently read an interesting analysis that demonstrated that comparing the debt of the government to family debt is faulty reasoning. Or, to draw a more apt family-government comparison, do not imagine that the the Congress is a family sitting around the kitchen table discussing what sacrifices need to be made to keep within budget. Rather, imagine the family sitting around the kitchen table discussing whether or not to write a rent check this month, and furthermore, imagine seriously discussing the option of telling the landlord to go f%&^ himself. There would be a rough consequence to that choice, and it wouldn't be because times are hard and we don't have the money. It would be a clear case of welching on a debt.

Since you are a banker, and you do have a good understanding of the mechanisms of finance, let me suggest what I think is a better comparison. I think the government is much more like one of your small business customers. Imagine a small business owner walking into your office and applying for a re-fi that she has taken routinely before. Are you going to throw the app back in her face, wag your finger and tell her she should have budgeted for this? She needs to make payroll tomorrow, and you have always carried her before. And why wouldn't you? She makes her payments, employs a number your other customers, and runs a business that plays a productive roll in your community. To suddenly act puritanical because she operates with debt, when operating with debt is how business works and has always worked, would be, to use your word, the height of audacity. Perhaps even arrogance. I might say madness.

I do not see the usefulness of painting all politicians with the same brush in this case. One of our political parties is threatening to pull the temple down on our heads to make a point on an unrelated issue. The other is trying to find some way to make the August Social Security payments.

Bjorn

sarah saint said...

Apparently, comments made from my phone don't post.

Thank you for your input :)

sarah saint said...

"The issue is not about the government living within its means, the issue is about making good on obligations we have already incurred."

I'm not sure how you're separating the two. The latter is impossible without the former.

"It would be a clear case of welching on a debt."

Because of failure to manage.

"To suddenly act puritanical because she operates with debt, when operating with debt is how business works and has always worked, would be, to use your word, the height of audacity."

Not puritanical. Cautious. I can't just give my customer unlimited credit. Say just last year I gave her three times what her business has ever made in a year, and now she's at my desk saying I have to give her more credit or she's just not gonna make her payment. For the greater good, I'll give her what she's asking today. I know people are depending on her, and they shouldn't have to suffer. But I want to see a revamped business model. I want to know why all the money I've given her in the past hasn't been enough. It's clear that this is an unstustainable, temporary solution. Sure, I'll help. But I don't want to see her in my office asking for more next quarter. And I certainly want to drive it home to her that 40% of her income is already going straight to debt.

Operating with manageable debt is part of the healthy ebb and flow of good business. Incurring massive debt on top of existing obligations so as to make the debt unmanageable and then asking for more credit as a last resort is not business as usual; it's a drowning business. It's the road to bankruptcy.

"One of our political parties is threatening to pull the temple down on our heads to make a point on an unrelated issue."

I don't think anyone in their right mind would say the GOP isn't making a huge ass of itself. They're going about making their point in a terrible fashion...doesn't mean it's an unrelated point, or that the point isn't valid. It's just a point that we need to come back to later.

theogeo said...

*peeks head into the room*

Also, "welching" is an ethnic slur.

*skedaddles*

sarah saint said...

I wish this place had a "like" button.

Also, Welch's pomegranate-blueberry juice, club soda, and a little stevia. Best mocktail ever.

freudiantypo said...
This comment has been removed by the author.
freudiantypo said...

*ducks in after LT*

Also, government plays a "role" not a "roll."

*high tails it*