Debt vs Bad leadership: Lesson from the U.S.A. Experience

Dreams of a Child

This past week my youngest son told me that he wanted to be president when he grows up. I still remember when I felt that way. As a child, I thought “I would make a good president.” I thought I had the qualities that you would want in a president. I was considerate of others, wasn’t selfish, made pretty good decisions, always spent less than I earned, and focused on long-range planning. As an example of the latter two qualities, I actually started investing into an IRA for my retirement when I was 16. I started putting money away for college for each of my children when they were born. I was certain that this sort of long-range thinking would be a great asset in a politician.

Ah, the naive dreams of a child. As I grew older, I began to see that politicians tended to have opposite qualities of what I thought you would want in a political leader. They were incredibly selfish. They spent more money than they “earned.” They funneled tax dollars into their districts so they could get reelected — even when it was wasteful spending. They didn’t think about what was good for the country or for the next generation, they were thinking about how to give their constituents the maximum benefit today, even at the expense of everyone else. Often, to get what they wanted, they had to agree to spend tax dollars on another Congressman’s boondoggle. As a parent trying to save money to help my kids go to college, I began to be appalled at the level of debt that we were heaping on the next generation, especially if that spending would be of no benefit to them.

A Loss for Our Children

Voters seemed to favor political leaders whose self-interests would lead to deficit spending. The more selfish the political leader — i.e., the more money they could funnel into their district at the expense of everyone else — the more likely they were to be reelected. Interest groups would make big campaign contributions so they could influence politicians to send more funding their way, thus ensuring that they could make more campaign contributions. Instead of being selfless and considerate, politicians tended toward the selfish, privileged, and narcissistic. When I began to understand what politics was really all about, any notions I had of ever becoming a politician vanished.

What you tend to end up with in politicians are people willing to say things they don’t believe, people willing to pander, and people willing to sell out their principles for votes. You have people who have no problem becoming complete and utter hypocrites. You have the environmentalist calling for expanded use of dirty energy and the fiscal conservative calling for wasteful spending — as long as that happens to benefit their district.

Due to the nature of our political leaders, for the holiday season this year we were given a Christmas tree bill, loaded up with tax cuts and special interest spending even though we are in a deep deficit hole. Apparently, President Obama is beginning to agree with the previous administration that additional spending doesn’t have to be paid for with taxes. In fact, as we have learned for over a decade, we can have lower taxes AND higher spending. Not a problem. We just have to agree that our immediate gratification is much more important than the futures of our children, and we can just send them the bill.

We have been the “Me generation” for far too long. We run up credit card debts buying things we don’t need and then declare bankruptcy when our stupidity catches up with us. We refuse to sacrifice; in fact we do the opposite of sacrifice. We treat ourselves, and let someone else worry about the consequences. In the case of the national debt, instead of leaving our children an inheritance, we are going to leave them a crushing debt to repay. They will be the ones who will have to grapple with bankruptcy as the country struggles to pay off debt and at the same time pay Baby Boomers their social security. It is a sad legacy we will leave behind.

Culled from: http://www.consumerenergyreport.com/2010/12/20/borrowing-for-the-present-at-our-childrens-expense/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+R-squared+(R-Squared)

NUTSHELL:

Bad leadership is universal. If things are this bad in the U.S.A. where the leadership consumes 1% of national recurrent expenditure in emoluments, one will wonder how bad it is in a country (Nigeria) where the leadership consumes a minimum of 25% (and that is the Nigerian senate alone). Racking up heavy debt for future generations is a rising trend in Nigeria. Total domestic debt appears to be higher than external debt while the private sector in Nigeria continues to get crowded out by the public sector. How's it like in your country?