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President Obama’s Continuing Debt-Sentence Will Crush the economy

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Imagine your college-age son returning home after four years away and pressuring you for a loan because he maxed out his credit card, line of credit, and overdraft limits. He tells you he needs more funds as his debts are for past bills, including dinners charged on his credit card.

He tries unsuccessfully to convince you that because his debts are for earlier bills, you must advance him more funds now; nevertheless, you are not impressed. You know generally debts are for previous spending, so that fact is not an issue. Besides, you want your son to become responsible, that’s why you insist that before prescribing a solution, he understands his spending habits that caused his debt-mountain.

DEbtIncomeEssentially, President Obama’s debt-ceiling views coincide with your son’s: Congress must hike the debt ceiling or prior bills will not be paid. After the hike, they must raise taxes to lower debts. No doubt, everyone will live happily ever after, until the next round of debt ceiling discussion. What a fatalistic perspective that resigns the Nation to a steady rising debt! Implicit in this approach are two wrong assumptions. First, present spending is acceptable; second, the country has unlimited taxation capacity.

Does the president believe the country’s taxation levels are competitive internationally? Does he realize raising taxes will reduce needed cash for businesses, which are the only productive job-creating entities in the economy? Does the president believe current government spending is acceptable and effective? When last did he look at the extent of government waste?

Instead of focusing on raising revenues, government must shrink. That’s how you lower debt; fewer government people thereby reducing the possibility of waste. Benjamin Franklin said: Beware of little expenses. A small leak will sink a great ship.

moneydownthedrainReality is President Obama and his party’s attitude to the debt ceiling is unsustainable. They believe they must feed continually, this massive government spending machine; they ignore the fact that allocating dollars to yesterday’s debt without stopping the cause of those debts, merely provides a platform for more debts.

Back to your son; how do you teach him that his attitude to money is irresponsible and will leave him destitute? Certainly, you must not give him more funds; you must focus on his attitude to debt, and his behavior that drives spending. You must teach him not to borrow; teach him to spend just when funds are available, and for needed items alone. However, most important, you must counsel him to develop a spending decision procedure which first settles the need, second, establishes how to pay for items without borrowing, and third, figures out the right time to act, given competing priorities.

Bills are not expense categories; they result from choices, good and bad. That’s why it is essential we look behind these bills to reasons for spending. Merely claiming that bills must be paid is irresponsible; we must establish the need for items that lead to those bills. As well, we must accept that there is a limit to borrowing, and most significantly, we must learn to live in that limit!

President Obama’s current approach which focuses on yesterday’s bills and raising taxes, instead of shrink government, is a recipe for a lasting debt-sentence for the American people; it will stifle economic progress.

Michel A. Bell is author of the The New Managing God’s Money-The Basics, teacher, preacher, founder and president of Managing God’s Money, and a former senior business executive. For Christian financial advice, biblical stewardship advice, and advice on personal effectiveness improvement, and other leadership matters, visit: Managing God’s Money.

Copyright © 2013, Michel A. Bell

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