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The harsh reality of No

March 5, 2014

One of the trending news stories is the New Jersey 18-year-old that decided she was too old to obey her parents rules and moved out, but still demands that they support her. Today she got a wake-up call. Someone told her “no” and made it stick. Judging from the look on her face, all that did was make her mad. She doesn’t understand yet that the judge did her a massive favor.

This is not a comment about the young lady in question. It is about the necessity of no.

At some point, reality is going to rear it’s immovable head and a large contingent of our nation will have to accept that we just can’t afford to keep trying to create a rainbow -and-butterflies world.

Very few people could honestly say that they don’t want to win the lottery and live on easy street for the rest of their lives, but most people know that is never going to happen for them. They know that the chances of winning the Powerball® is 1 in 175 million. That doesn’t stop them from buying a ticket.

That’s kind of the liberal philosophy. Deep down, they know that one day the money to pay for all this largesse is going to run out. They know that the high income people can’t support the rest of us on the public nickel forever. They might even understand that restricting job growth is actually hurting the people they claim to want to help. They just figure that the odds of it happening on their watch is pretty slim, so why not buy a ticket and go along for the ride?

Enter the 2015 $3.9 trillion Federal budget request from the White House. Once again, it reflects a somewhat schizophrenic philosophy. To be fair, a lot of the revenue raised will supposedly be used for deficit reduction, and that’s good. However, given the President’s penchant for “clarifying” the administrative rules, one has to wonder whether that would really happen.

Interestingly, some of the “entitlement program” cuts, specifically $402 billion  over 10 years, come from Medicare and Medicaid, two programs that serve the poorest of our population. Since Medicaid is where a lot of Obamacare enrollees will wind up, and the number of seniors eligible to access Medicare will continue to grow for the next fifteen years or so, that seems kind of odd. Of course, the Feds commitment to the states to support the expanded Medicaid enrollment goes from 100% down to 90% in ten years, so maybe that’s the proposed cut. Unfortunately, someone will still have to pay the entire Medicaid bill but hey, that’s ten years out. Definitely not today’s problem.

If we didn’t already have a national debt that will be 120% or more of our annual GDP by 2016, a $3.9 trillion budget wouldn’t be an issue. In 2012, the last year for which firm numbers are available, the GDP was reported at $15.68 trillion dollars, and at an average growth of 2.4%for the next year or two, it should hit about $16.45 trillion by 2016. The problem is that our national debt is already more than $16.45 trillion, and it isn’t going to go down by 2.4% annually for the next two years.

It’s really easy to justify spending money on luxury items, and ignore the ever-increasing balance on your credit card if you have the money to make the payment every month. When you can’t make the payment anymore,  it’s a little too late to wonder if you should have bought a Chevy sub-compact instead of a Lamborghini. At that point, someone is going to take your sports car away, and you won’t be able to afford the Chevy either.

Maybe all of our creditors will self-destruct and we can write off our debt, but that’s a longshot bet at best, and pure fantasy at worst. Maybe it’s time to tell ourselves no, while we still have the freedom to do so.

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