Sunday, December 06, 2009

A Conservative Viewpoint
- America Needs Debt Counseling

Article by Bob Steinburg
- Edenton, North Carolina: Cradle of the Colony

“Dandy” Don Meredith, a former Dallas Cowboy quarterback and retired analyst from Monday Night Football, used to say: “If ‘ifs’ and ‘buts’ were candy and nuts wouldn’t it be a Merry Christmas?” I used that quote last week during a conversation with employees of the dealership servicing my car.

As is my custom, I use the waiting time to visit the showroom and talk to shoppers, sales personnel and management. My kids often joke I’d talk to an open mail box. On this day, I was the only visible customer. In fact, I noticed but a few sales personnel.

“How’s business?” didn’t seem to be an appropriate ice breaker. I might have surmised everyone was out for lunch but given the time of day and our country’s economic morass, I knew better.

This is a very large Big Three automobile manufacturer’s dealership. I asked the general manager if the $3 billion federal “Cash for Clunkers” had been a success for him. He said the program was probably unnecessary at best and a bad idea at worst. He cited he had gas guzzling pickup trucks and SUV’s being traded in for newer models that increased mileage by only 1-3 miles per gallon; this in spite of a program that was not only supposed to stimulate sales but to get the gas hogs off the road.

The manager discussed other negatives. Similar to the mortgage crisis where home buyers were “qualified” to purchase homes they couldn’t afford, some car buyers are finding themselves in the same boat. “What was I thinking of?” is a frequent comment. “I can’t afford these payments,” is another. What does that mean for our economy down the road?

Many auto dealers now are required to send their banks all of their financial information every day. Banks who floor plan (finance) dealer inventory used to visit the lots three to four times a year to count cars. Some are now showing up three times a week. If the economy is supposedly turning around, no one has informed the bankers.

With all of the so-called programs to loosen credit, it isn’t happening. I was told about an 80-year-old who had financed many cars through this dealership. Now she was unable to secure financing. Her credit score was an exemplary 800 plus. She owned her own home. Her credit report didn’t have a blemish. Because she was not employed, the bank required a 50 percent down payment. This isn’t only tough on the customer, but the dealer who is trying to make sales to survive.

Many attempting to refinance their home are faced with similar hurdles. A friend with a credit score of 740 (very good) was unable to secure bank approval. “The banks didn’t even want to talk with me,” she said, “and I have a good job.”

Individual and corporate taxpayers, many with good credit, had their tax dollars go toward bank bailouts. Yet now some of those individuals find the bank doors being slammed in their face. Either the banks have calculated that things are worse than we’ve been told, or they are scrambling to pay back bailout money to escape further government scrutiny.

It’s not just the folks who are uneasy. The business community is equally anxious. Passage of the pending Healthcare Reform Bill and the looming Cap and Trade legislation can only further exacerbate a situation that has many businesses already wheezing from over taxation and regulation. Companies struggling to retain jobs and hopeful of one day creating new ones will only be further hampered by additional government burdens, perhaps making both of these fundamental business objectives little more than an opium pipe dream.

As we reflect on Christmas past, we as a nation have experienced great abundance. While not all have shared equally in our national bounty, the lives and welfare of most Americans have improved with each succeeding generation. In my view, it’s a mistake for our leaders to continue to embrace the concept of further emasculating the capitalistic engine of prosperity in favor of expanding government intervention into all facets of American life.

America has created a template for commerce that has served us well. It’s broken only because members of both parties of Congress haven’t always played by the rules. Yet, instead of trying to get fundamentally back on track, liberal and progressive Democrats are curiously abandoning the proven concept of individual and corporate freedoms that foster liberty and economic opportunity. Instead they are conditioning citizens to become followers instead of leaders, encouraging dependence over independence.

We can “if” and “but” and continue to try various purported spending cures for our malaise until the cows come home, when in fact the cure for what ails us is as obvious as the nose on our faces. Freeze spending immediately which will axe any spending initiatives that are not fiscally self-supportive from day one. We must then address the debt that continues to chafe at the loins of our independence. China alone holds almost $1 trillion of our national debt and another trillion in dollar reserves. Continuing to increase borrowing is only certain to hasten the day of our nation’s fiscal Armageddon.

Until we realize our sovereignty and freedom depend on our nation’s financial independence, we will continue to risk our future to a very dangerous international board game of Monopoly. Right now China is holding the bank and many of the major properties. It’s going to take more than a roll of the dice for America to get back in the game.

The most serious problem is the reality that the tax burden is going up, no matter what happens. When George W. Bush passed his tax cuts (most of them going to what are truly middle class), he failed to get them made permanent. As a result America is about to see our taxes increased substantially next year. Barack Obama likes to call this "undoing the Bush tax increases for the rich".

That sounds good. It covers a truly different reality. For several years now our taxes have been assessed at one rate. Next year they go up. Whether semantically this is a tax increase or (as Democrats argue) ending a tax decrease, the economic consequences are going to be a shattering of the economic recovery that should be starting to gather steam about that time.

This is going to happen whether the tax increases of the Health-Care bill pass or not. This is going to happen whether the tax increases of the Cap-And-Tax bill pass or not. This is going to happen whether the tax increases that are being stuffed into every bill that passes our extremist dominated liberal congress go into effect or not.

There is a great chance that Republicans will take control of congress next year. There is no chance that the amount of control will give Republicans enough votes to over-ride a Presidential veto. Therefore there is nothing that can be done. We are simply minimizing damage at this point. Republicans are actuallly haggling about what they believe and there is a good chance they will not be effective in countering the Obama regime as a result.

Debt counseling is a good idea. Unfortunately, the one person who really needs it has no intention of listening. That is Obama.


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