Monday, March 6, 2017

Budget Issues Approaching Very Fast And Soon Upon Us

When is an issue declared as really not that important? Possibly when it relates to national spending. It seems ages since the topic of our national budget has been front and center, and while budget issues are fast approaching serious discussions may again be pushed aside by various distractions. The subject of the budget and our deficit has dropped off the radar while the focus of the American people has wandered off to subjects like whether Trump will survive the protest and attacks from liberals and the remaining never Trump faction or what to do about Washington's last big fiasco known as Obamacare. The unfixable healthcare legislation that will always be viewed as President Obama's legacy is in deep trouble after failing to achieve its goals and to many Americans it is seen as the poster child of government failure.

Sadly, little has changed since I broached the subject of our budget in August of 2013 except we have seen the national debt explode far beyond the numbers our government predicted when President Obama took office. Somehow we have ignored this reality and we have been lulled with the rest of the world into complacency as the American government kicked the can down the road. The increase in national debt from 3 trillion dollars in 1990 to 5.75 trillion dollars in 2000 garnered far more attention than the roughly 10 trillion dollar leap that occurred during the 8 years Obama was in office. Not suffering from our failure to deal with our massive spending has only reinforced the idea that far too much has been made as to the ramifications of our out of control budget. Today Washington is divided and America polarized and even if politicians work together more government is often not the answer. The fact is for years the answer from Washington has been to spend and simply create more debt.

Debt Has Soared Above All Forecast
This time no one is referring to our financial woes as a financial cliff, the sense of urgency has vanished and been replaced by the feel of normalcy. This does not alter the fact that while we cannot talk our way out of the mess before us and putting it off and sidestepping the issue will only make it worse. The last election was proof of just how unpopular and downright dysfunctional Washington has become. It seems Congress is often off on recess, which is a thing many of us who live in the working world might dub as a paid vacation. At least we will no longer be forced to endure the broken record of President Obama busily crediting his administration with sound policy and taking credit for bringing America back from the mess he inherited. In truth, we seem no closer to addressing the problems of our nation today than we were last year or in the years before.

While the stock market has cranked out a series of all-time highs I'm troubled by the fact that as I read the news today jumping off the page are announcements from a slew of major businesses declaring their intention to close dozens of locations. Abercrombie has joined a long list of brick and mortar retailers that have announced closures this year. Also, JCPenny plans to close up to 140 stores in the next couple of months, following decisions by Macy's and Sears to close a collective 218 stores in the first half of the year. Other mall-based stores including American Apparel, The Limited, Bebe, BCBG, and Payless have also recently announced that they are shuttering all or most of their stores. This does not bode well for malls, commercial real estate, or the economy in general.

Commercial real estate such as malls and the brick and mortar buildings that line the roads of America represent jobs and trillions of dollars of stored wealth held by investors and pension funds. These store closings could be viewed as a harbinger of things to come or should we say the classic canary in the coal mine and are far more important than the value of stocks like Facebook or Tesla. Many of the Americans who felt America was on the wrong path turned out to support Trump and hoping he could fulfill has promise to "Drain the swamp" a reference to the slime filled city we call our capital but this is easier said than done. Much needs to be done but bringing our budget back under control is not a Trump priority so we should not be shocked when budget issues are only faced, and very poorly dealt with at the last minute. I am reminded of a saying I heard years ago, "if not for the last minute nothing would ever get done" it is unfortunate this has become the norm.

Budgets and spending plans to fund the government are very important in shaping the country's future and should not be taken lightly. Mixed in with Trump's good ideas and promises are a few, shall we say, that are not so good and could explode an already massive deficit. Sadly, while spending is important it is not being given "priority" status. I'm afraid this will not soon change and again we will be forced to fortify ourselves with the knowledge that the President has hit the countryside with the message that he "has again" put front and center the issue of the economy with economic growth as a priority. Speeches including tired and well-worn phrases like fairness, a more prosperous middle class, increased equality and opportunity, are messages that ring hollow without action to back them up.

1 comment:

  1. So we're losing malls but gaining factories. For now I'll take that trade. We need the factories as a basis for prosperity. Retail may suffer a while but it may recover, anyway it's less important. We can't survive just spending, we have to make and sell things, lots of things, expensive things that we're paid well for.