December 7th, 2017

 "Shutdown"

 Yesterday evening and this morning, I've watched the news intently as our government goes through the same old song and dance of saying that our government has to "shut down," because we are out of money.

That idea has always been baffling to me, because every time we need "money" for something, we just "borrow" it from the Federal Reserve.
If there is a war, we "borrow" trillions (yes, trillions) of dollars to finance it.
When there is a catastrophe, we "borrow" billions of dollars to send aid and hire contractors to fill the bill.
When I was a little kid in El Paso, Texas, I had a "piggy bank" (except mine was a Model T Ford made of pot metal). It always had twenty or thirty cents in it, but around birthday and Christmas time, it had anywhere from $5.00 to $30.00 in it. I couldn't borrow money from anyone, and when my car was empty, that was it. I had to wait for allowance time to get more money, which was the first of the month, when I would always receive $5.00. I couldn't buy model airplanes that cost $25.00; I bought ones that cost $3.00; and had $2.00 left over for glue, candy, or whatever else. 

But when I grew up, I used credit cards. I could buy things that I normally couldn't, and tell my friends at work about them. I also bought things I didn't need or even want; I just bought them because that magic card in my wallet allowed me to. Of course, that "money" had to be paid back. When I fell behind on payments, I began owing more money. Soon, and very soon; I owed more money for the things I had purchased than they were ever worth in the first place.

 Ladies and Gentlemen, that is where our government is today. We, the people of the United States of America, are almost 19 trillion dollars in debt. Contrary to popular belief, that debt is not backed by gold, silver, or leprechauns with secret pots of rubies. Ok, there is that 6 billion at Fort Knox. You can compare that ratio like this. Take a loaf of bread. Remove one slice. Divide that slice into one thousand pieces. One of those pieces would represent the amount of our debt that is backed by gold. Our nation runs on "money" borrowed on credit.  As of 1913, the Federal Reserve became our National Bank, and we've played this game since. The Fed will tell you that our nation's GDP and her household's assets balance that out. In reality it doesn't come close.

What is our government's answer? Shut down the Federal Government for a day, a week, or a month. That'll solve it.

Sure, and I have a date with Sofia Vergara tonight.

The concept that a government shutdown will put the slightest dent in the National Debt is ludicrous. A "government shutdown" accomplishes three things: A) It creates massive paperwork backlogs. B) It interrupts critical procedures and processes, and C) gives our government more time to dork around in committees instead of doing their jobs.

 

Why are we in such debt? We'll dive into that discussion in January.

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Happy Holidays, and may you have a Blessed Yule Season.

-Jim