ECONOMIC ANALYSIS:

Thinking About Bravado

by Fred Cederholm
Government leaders tell us more by what they do not say. They show us more, by what they do not do.

I’ve been thinking about bravado. Actually I’ve been thinking about our “almost” government shutdown, Washington D.C., our “THREE STOOGES,” other non-essential items and personnel, Social Security, our troops, Clinton Era “surpluses,” and hoopla/ hype/ theatre. Last week our nation dodged a bullet — the much heralded shutdown of Federal Government services didn’t happen. One would TH*NK the archangels were blaring their trumpets to announce that our public servants in Washington could finally agree on something. I would guess our “gummint” is less than ten percent efficient at doing anything — including spending money. We don’t have a budget yet for next year... unless you consider the anticipated spending of ONE POINT SIX TRILLION more than the Federal Government is taking in, as having a budget?

You see the present “spending resolution” would have lapsed, or run out of gas last weekend. A “spending resolution” authorizes the expenditure of the little real money we actually have coming into the Treasury plus all the money Uncle $ugar is printing, plus all the money the “gummint” can still borrow from the pensions that Uncle administers (mostly Social Security) plus all the money Uncle is still able to recycle/ borrow from our foreign Sugar Daddies! A “spending resolution” does not draw its controlling legal authority from the US Constitution, au contraire, mon ami, it has evolved as a convenience over the years to “fill in” when there is no budget. It is like some “illegitimate appropriations bill,” but on steroids.” It is an accounting fiction. Besides this fast and dirty substitute measure keeps up the appearance that our Congress is actually doing something. When you cannot produce anything of substance, you create a new inflatable. You make a something from a nothing...

Washington D.C. had once again gotten religion from the last election — or at least they claim they have gotten religion. They “feel our pain” and “will get it right this go round.” It is really more like the cult of lobbyists and special interests are still toting their UBI EST MIHI (where is mine) doctrine, but they have thrown in an “hallelujah” and “praise the gummint” every now and then. They bow to the mammon of “$elf intere$t.” In any case, the money continues to flow where the insider wants it to flow. They are giving us mute testimony in an oral way (TH*NK about that one for a minute, or two). They tell us more by what they do not say. They show us more, by what they do not do. Earmarks and pork riders are the bane of Congress, yet there is no mention of eliminating these costly, and evil, practices which are breaking us. When you do “it,” you have got do “it” with gusto and bravado.

Watching the theater of the absurd of Curly, Larry, and Moe... I mean watching the President, Boehner, and Reid as their people negotiated into the wee hours of the morning to get a workable compromise in the cuts was tragically laughable. How many times did we hear about non- essential items and personnel being cut? From my perspective, if they are non-essential, what are they doing there in the first place? Instead, we were hit by the impact of delays in paying out Social Security and coming up with the paychecks for our troops. The parks and museums would be closed! Give me a break....

Let me point out that Social Security is sitting on a SURPLUS of roughly $3.8 TRILLION — a legacy from the Reagan years’ increases in rates and taxable bases. The problem with Social Security is that these surplus funds have been spent elsewhere and there is nothing left, but some moth eaten IOUs in a lock box somewhere along the bowels of the Potomac. To make the obligated payments to the seniors (et alii) Uncle must print, borrow, or re-appropriate other fictional monies to meet what they are now implying is a fictional obligation! This is resolved via the magic of spending resolution — ditto for the paying of our troops. Since wars are no longer declared... the fictional army, gets a fictional payroll, from a fictional spending resolution authorizing fictional greenbacks. It is perception that matters. Our money is actually debt, a liability. One man’s liability is another man’s assets when accepted as such.

I love it when our totally broken system has one of these crises of seemingly messianic proportions. The last time a “shutdown” occurred, we saw the myth of the “Clinton Surpluses” spring to life. The bickering in DC was so bad that our Uncle $ugar could not agree on anything, including the spending of money. There was no surplus... checks maybe were not issued on a timely basis, but every obligation was ultimately met (with more fictional fiat money, and our national debt(s) continued to rise) so did this shutdown really matter?

We are rapidly approaching the current cap on a debt of $14 TRILLION. This will be the next crisis to descend upon us. TH*NK about it... if we have no intention of ever paying off the $14 TRILLION we already have, where is the harm in adding a few TRILLION more? When you TH*NK about what actually happened last weekend with all the hype/ hoopla/ theatre about this shutdown crisis: nothing changed, nothing was accomplished, and nothing was resolved. But this nothing-ness mattered, because our leaders went before the cameras and told us we were now on the right track and all would be well. Bully for the “bully pulpit.” It was all done with bravado. It is bravado that matters... not the substance.

I’m Fred Cederholm and I’ve been thinking. You should be thinking, too.


Copyright 2010 Questions, Inc. All rights reserved. Fred Cederholm is a CPA/CFE, a forensic accountant, and writer. He is a graduate of the University of Illinois (B.A., M.A. and M.A.S.). He can be reached at asklet@rochelle.net.



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This story was published on April 11, 2011.