Debt Ceiling

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Our Congress is again dealing with the issue of raising the debt ceiling. This almost biannual event is becoming a grandstanding show and not legislation. I would think congress would be embarrassed for showcasing their incompetence of not being able to control their spending.

They seem to have no concept of how to run government like a business. It is the biggest business in the country after all and we have politicians who have never run a business in their life trying to manage it. It makes as much sense as hiring a school bus driver who doesn’t know how to drive a car.

They don’t know the difference between investing our tax dollars and spending them. Investing means they put the money where it will defer or reduce future expenses. The tendency now is to spend tax dollars to get votes with little regard for reducing future expenses, instead they spend on entitlements that become unsustainable.

They also work from the demand side of the budget and not the supply side. They have their wish list of things they want to give us to get votes. They then persecute the tax payer by penalizing success by constantly trying to raise taxes on corporations. This shell game only causes businesses to raise their prices leaving the consumer to eventually pay the tax through higher prices. They should work on the supply side by limiting the spending to only the income they receive. A family is should not borrow money to go on vacation.

The National Debt will never be paid off, but it must be controlled. No business operates entirely debt free. It is leverage and the decision to borrow is a decision made because money can be borrowed at a lower rate than the return they will receive from the investment. No one pays off a 3% loan with money on which they are receiving a 6% return. So if the country wants to borrow more money, it better show better rate of return than the rate at which they are borrowing.

Even the most hardened spendthrift individual eventually realizes they can not keep borrowing money to have parties with nothing to show for it. Just think, if politicians did not have a huge debt to deal with, these liberal spending habits would soon max out their credit card again. This is what running the country like a business means. All the complaining about how the current administration running things like a business is from those who fear their credit card will soon be canceled.

This is Keith Kube wishing you the best in making the world a better place.

Keith Kube, of Crofton, is a business analyst and author of two book on business management. During his career as an engineer, investment banker and business analyst he identified traits commonly overlook that are vital for all successful business operations.