U.S. needs to get deficit under control

Most of us who have heard the saying "Nero fiddles while Rome burns" may not be aware that the fiddle, or violin was not invented until the 16th century.

Regardless of it's dubious origin, the saying is not as important as it's modern meaning which is "to occupy oneself with unimportant matters and neglect priorities during a crisis." Some say Nero started the fire, but who really knows and today how many really care? I bring this saying up because it has current relevance.

This past Monday Standard and Poors, the most widely recognized rating and analytical agency, publicly warned that unless the USA gets it's deficit under control and soon, our coveted AAA rating is in danger of being downgraged in as little as 2 years.

S&P went further to say that they had serious doubts that the Obama administration and Congress could agree on anything meaningful to reduce our deficit and gave the chance of a downgrade at one in three. For those gamblers out there, that is pretty good odds our bond ratings will be reduced.

The announcement, on what is normally a slow, short week due to Good Friday took the stock market by surprise and pushed gold above 1,500 ounce. Other commodities and hard assets shot up as well as money ran for safe havens. Those havens used to be the U.S. dollar and treasuries, but not anymore.

The president, along with various congressional talking heads took to the airwaves in an attempt to debunk the importance of the S&P warning saying that such a thing could never happen. Finger pointing started right away about what party was trying to get rid of old people and starve children. Most of us, having heard all this before suffer from "disaster fatigue" when it comes to our current batch of Nero's telling us that if we listen to anyone who has a different point of view, we will all surely suffer terribly. Oh, really.

People, it is time that you take control of your fears and do not allow yourself to be manipulated by those who tell you things your head wants to hear, but leaves your gut churning. I learned years ago that my gut was usually right and I have yet to be disappointed when I listened to that inner voice that told me "if it sounds too good to be true, it probably isn't (true)."

This week, all the Nero's, like a pack of used car salesmen, were doing their best trying to convince all of us that everything is just fine and that Standard and Poors was jumping the gun. So ask yourself, is it possible that the USA could get a bond downgrade that would raise interest rates on debt service creating further deficits?

Could the administration and congress not come up with any meaningful plan to reduce the deficit over the next two years? Can $14 trillion in current debt and up to $120 trillion in unfunded future entitlement benefits promised to current working people actually be managed or eliminated with absolutely no pain or austerity on the population? If you can answer "yes" to any of these questions, you may be hearing your inner fiddle. Personally, I smell something burning.


• Carol Perry has been a Northern Nevada resident since 1983. You can reach her at carol_perry@worldnet.att.net.

Comments

Use the comment form below to begin a discussion about this content.

Sign in to comment