Foolish

The word of 2007 was “surge.” The word of 2008 is “bailout.” I want to say that all this bailing out and buying up of commercial stock and debt by the government is pretty foolish. The U.S. Government is now creating massive budget deficits (i.e. borrowing money) to replace private deficits (borrowed money) created when government run financial institutions (Fannie Mae/Freddie Mac, established via Carter-era housing legislation) made bad decisions. Essentially we’re throwing good money after bad, which is going to cause big problems in the long run.

The expanded calls to now bailout the U.S. auto industry for making bad decisions in its own industry and the idea that such bailouts should come with new government mandates is an even bigger issue. This is incrementally moving us closer to communism where the central planners pick and choose how everything runs. This means we will get one-size-fits-all solutions that fit no one well. It also creates a single point of failure for decision making where mistakes made by a small core of leaders get to have massive repercussions (see the current mortgage crisis is just such an event).

I believe the U.S. Government’s current fiscal policy is ridiculous and foolish. Looking back through history, bad decisions dealing with debt on a similar scale was a major contributor to the causes of World War II and I don’t doubt that such an event may now loom on the horizon again.

A lot of folks are drawing parallels between President-elect Barack Obama and President Franklin D. Roosevelt. Many see this as a positive comparison and, given Obama’s announcement of infrastructure development plans, there certainly seems to be some similarity. Just remember, Roosevelt was a charismatic leader that presided over a 10 year slump in the economy. Some argue that his policies were a good portion of the reason for the length of that slump. His Presidency also ended in world war. I dearly hope that history does not repeat itself in this way, but things aren’t looking good for the home team.

Fortunately, while I don’t relish the thought of hardship, I know my God is sovereign and true and am not worried. There are worse things than economic hard times and war and death one can face. In the words of Jesus recorded in Luke 12:4-5, “I tell you, my friends, do not fear those who kill the body, and after that have nothing more that they can do. But I will warn you whom to fear: fear him who, after he has killed, has authority to cast into hell. Yes, I tell you, fear him!”

Cheers.