The best Yahoo Finance Commentary I've ever read
I know I'm two days late but I just read the most recent article by Charles Wheelen on Yahoo Finance. His commentary is the best commentary I've ever read on Yahoo. Its clear, simple, non-partisan and straight to the point. Its the kind of reality check that our political system (and the majority of this country) is severely lacking. I like the entire article but I'll highlight some key points:
Ben Franklin supposedly said that it's better to skip supper and go to bed hungry than it is to wake up in debt. Ben would be quite disappointed in us. We Americans didn't skip dinner; instead, we opted over the past decade to gorge at the buffet and then charge it.
Big debt means big interest payments. The Chinese haven't loaned us a trillion dollars because we're good-looking; they've loaned us a trillion dollars because we pay for the privilege of using that capital. Interest payments now make up more than 8 percent of the federal budget -- meaning that nearly one of every 10 of your tax dollars gets you absolutely nothing in return. No schools, no bridges, no domestic wiretaps.
We need to stop bickering about who got us here. Was it the Bush tax cuts (yes) or the Obama stimulus (yes) or profligate Congressional spending (yes) or voters who continually reward pork more than parsimony (yes)? But analyzing just overcomplicates things. We are deeply in debt because we have routinely spent more than we collect in taxes. That's just a mathematical reality that has become needlessly confounded with politics.An economic recovery will help. But we can't pretend that will be enough. We need to raise taxes, cut spending, and/or reform our entitlement programs. Probably all three, and in a serious way.
Will that dampen economic growth in the short run? Yes. Will it jeopardize important social programs? Yes. Will it compromise our ability to make important public investments? Yes. Does it limit what we can spend on healthcare reform? Yes.
But as Ben Franklin would have pointed out, we should have thought about that before ordering room service and then charging it to a credit card.
He also touches on a few other subjects like the malinvestment of our borrowed funds, how our creditors are worried about our debt and how inflation is the wrong answer to this crisis. Overall I think he hit the nail on the head.
To me this is the best commentary I've read on Yahoo Finance. Half the Yahoo columnists cater to the "Suze Orman" crowd it who need to be told how to pay their credit card debt or clip coupons for groceries. The other half just post overly general commentary on some arbitrary subject. Then there’s Ben Stein and Robert Kiyosaki who in general have their moments. But more often than not I read their articles and shake my head. I often find the comments to the articles more informative and entertaining than the actual articles themselves.