Teeing Up the Middle Class
A family that consistently lives beyond its means, and cannot seem to budget sufficiently to live within its income, has two choices to cover the ongoing shortfall. It either finds a second job or it lives on credit cards. If a second job is not forthcoming, and the credit limits get maxed out, then the average family hits the proverbial wall.
A government that lives beyond its means, and intends to provide everything for everyone, cannot be disciplined to live on a budget. No politician wants to preside over a scenario where people lose benefits, because these are viewed as entitlements by the general populace.
For the government, a second job is a tax hike. NO MORE Mortgage believes that this is exactly what will be coming in the year 2010. We believe it will kill jobs and cause the markets to decline.
We have seen our government live on credit (this is why the Treasury has sold so many bonds which mostly the Chinese buy) and we have even seen our government simply print money, which is a huge advantage any family would love to have.
Unfortunately, both of these options devalue the US dollar, make our imports more expensive, and put our domestic manufacturers at a disadvantage in world competition. It cannot continue forever. The Chinese have made 2 trips to Washington in the last few weeks to politely remind US officials that they cannot stand for further borrowing and further devaluation of their investment in American debt.
NO MORE Mortgage believes that the solution for families and for governments is to live within our means. Hard as this may be, the alternative consequences, which are being kicked down the road, will be worse. Today’s Wall Street Journal tells us how the Obama solution may work. Please read on, and fasten your seat belt. An immediate 10% inflationary hit may very well be coming our way.
For the rest of the story please visit www.online.wsj.com
Related posts:
Filed under News by on Aug 7th, 2009. 
Leave a Comment