Sen. Jim Bunning of Kentucky recently took a lot of heat for trying to hold up a $10 billion bill to pay for extended unemployment benefits. Basically, he had the audacity to ask Congress how they intended to pay for it. His point was that Congress, at some point, has to learn to stop borrowing and spending money they do not have, that it is a violation of their fiduciary responsibilities. Bunning has a point, an unpopular one, but valid nonetheless, and I think it foreshadows the shape of things to come.
As parents, we all admonish our children not to spend money they do not have, or to incur debt. Inevitably, our offspring discover credit cards and a drunken spending spree ensues followed by debt and plummeting credit ratings. The concept of seemingly free cash is irresistible to people, be it a teenager or a Congressman. Unfortunately, it is what generates votes and elects public officials. As voters, we do not elect people based on their management or leadership skills, nor their decision making capabilities, but rather by the "freebies" they promise to give away. It is an addiction that is essentially no different than drugs.
I am reminded of when Gerald Ford went before the American people in a State of the Union address and said in effect, "My fellow Americans, I'm afraid the state of the union is not very good..." It was honest, it was truthful, it was forthright; but it also cost him the 1976 Presidential election as it was something the American public didn't want to hear.
Our refusal to face reality and not live within our means has caused a drop in our standard of living. To illustrate, a U.N. report points out our standard of living continues to decline (we're now 10th in the world with countries such as Norway, Iceland, Australia, and Canada ahead of us).
At some point, we are going to have to face reality and curb our appetites. As Pogo said, "We have met the enemy and it is us." This means, whether we like it or not, we will all have to make sacrifices in both our personal and professional lives. No, we may not be getting that bonus we routinely expect each year. In fact, we may have to take a pay cut or a lower level job. No, we may not be able to afford to send our children off to college. No, we may not be able to afford to retire when we wanted to, and have to work several more years. And, No, we may not be able to afford certain luxuries, such as opulent gifts, vacations, or dine out at restaurants as often as we like. We may also have to downsize our residences and transportation requirements. This will all test the character of the American people.
Unless we learn to live within our means as a country, I'm afraid the recession of 2008-2009 will be nothing more than a sneak preview of what is to come. A redistribution of the wealth won't work if there is no wealth to redistribute.
I had a friend recently tell me Americans were nothing but "mules." He explained that a mule is a hybrid of a female horse and a male donkey. "A mule has to learn he will never run as fast as his mother, or be as obstinate as his father, instead, he has to learn to accept who he is and live within his means, not more, not less."
It may be a strange analogy, but he's got a point.
By the way, I was a big fan of Bunning when he was with the Phillies and remember his perfect game against the Mets in 1964.
Keep the Faith!
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Tim Bryce is the Managing Director of M. Bryce & Associates (MBA) of Palm Harbor, Florida and has over 30 years of experience in the management consulting field. He can be reached at firstname.lastname@example.org
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