Just imagine you had $100,000 in personal debt. Your income only covers payment of $39,000 on that debt. Now, you write a check for $61,000 to cover the balance of debt. Now, imagine seeing the County Sheriff at your door with a warrant for your arrest.
In our personal finances, we call this act ‘check kiting’ or ‘writing hot checks’.
Why is it we allow the federal government to do this under the label ‘quantitative easing’? When the Sheriff comes to your door, will he believe you’re just ‘borrowing’ $61,000?
According to a Wall Street Journal article,
“Last year the Fed purchased a stunning 61 percent of the total net Treasury issuance, up from negligible amounts prior to the 2008 financial crisis…This not only creates the false appearance of limitless demand for U.S. debt but also blunts any sense of urgency to reduce supersized budget deficits.” — Lawrence Goodman, former Treasury official and current president of the Center for Financial Stability
Read more: WSJ: Fed Buying 61 Percent of US Debt
Here in the City of Rockwall, we will be voting on a huge capital bond package in May. I personally like all the issues, with some misgivings around the Downtown components.
Reality is simple: national debt is OUR debt. True, we read and hear stories about economic woes in other states like Michigan and California, thinking that’s their problem.
Fed Chairman Ben Bernanke recently stated before Congress, “We risk going over a massive financial cliff.” As you well know, “we” is the first-person plural pronoun that includes Ben Bernanke, you and me.
Chairman Bernanke went on to say, “Under current law, on Jan. 1, 2013, there’s going to be a massive fiscal cliff of large spending cuts and tax increases.”
I strongly encourage City of Rockwall voters to vote ‘NO’ on all five propositions. Let’s allow Januray 1, 2013 to go by us before adding tens of millions of dollars of indebtedness to our property owners.