Sunday, July 16, 2006

I Never Thought Someone Could Say This About America

In the months leading up to my deciding to run for congress I was feeling some pent up frustration--and quite frankly--some bona fide fear. I am a consumer rights lawyer. That means that people come to me with all kinds of financial problems. Some people get into trouble when they get into car accidents, they get cancer or some other dehabilitating disease, their spouse leaves them and wants a divorce or an employee will steal from a client causing a business strain or even to go under. These situations cause financial disasters. Whether it is tax problems with the IRS, overwhelming debt that requires a settlement with creditors, or the last resort--bankruptcy. Sometimes I stand up against predatory lenders for my clients, and often we prevail. In the seeming dichotomy in the mercy/justice debate my practice advocates for mercy. I get satisfaction from this work.

However, after being surrounded by these problems on a daily basis I also see some alarming trends in our culture. The credit industry is so powerful in its marketing power that Poor Richard's advice of "a penny saved is a penny earned" perpetuated in the foundation of this country and through the 20th century seems to be turned on its ear. Now I see a prevalent maxim--"A penny borrowed is a penny earned." There are thousands of people cashing out their equity in their house for vacations and luxuries while maxing out their credit cards for eating out and Ipods. If I asked my clients in bankruptcy if they ever planned to be in their current situation they all would say no. Financial ruin sneaks up on you like a boa constrictor--it will slowly snuggle up, wrap around and suffocate its victim. Often its victim doesn't realize what is going on until it is too late.

After working in this industry, the national news I heard everyday was starting to wear on me. This Administration and Congress has been on a spending spree and has been incurring debt a lot like many of the people I see in my area of legal practice. I sometimes wonder if there is a correlation between the spending of our governement and the spending spree causing record numbers of bankruptcies. Our government has been racking up our nation's home equity line and maxing out their credit cards. The debt is so large that the generation in power will never be able to pay it off. It will fall to my generation and my children's and their children's generation to either pay it off or deal with its consequences.

They used to call democrats tax and spend liberals. I think it is worse to be a borrow and spend neo-con. At least the democrats of old would pay for their programs as they went along instead of passing their debts on to their grandchildren. I believe we cannot go back to the tax and spend days and we need to put in stop gap measures to prevent this even more pernicious trend of borrowing against our country's future. This will only happen through real campaign finance reform. We need to stop the phenomena where corporations invest a few million in contributions and get a few billion in pork in return. The fear of this trend leading our nation to insolvency was a major motivation for my running for Congress.

Though I have seen it coming, I was still in awe when I saw this article today, "US 'could be going bankrupt.'" I never thought that this proposition would even be brought up about the United States of America. The author of this argument is no crazy conspiracy theorist. He is Professor Laurence Kotlikoff for the Federal Reserve Bank of St Louis, a leading constituent of the US Federal Reserve. Professor Kotlikoff makes the following points:

  • "The proper way to consider a country's solvency is to examine the lifetime fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy."
  • The United States has experienced high rates of inflation in the past and appears to be running the same type of fiscal policies that engendered hyperinflations in 20 countries over the past century."
  • Expecting a fix now is probably asking too much of short-sighted politicians who have no incentives to do so. But a fix, or at least a succession of patches, will come when the problem becomes more pressing."

We need members of Congress who not be a rubber stamp of the national party leaders. We need a change where our members will vote for reform--reform in the financing of elections, reform on pork barrel spending, reform on no bid contracts. Let us elect a freshman class of congress akin to the wave in 1974, when in the midst of the Watergate scandal, the freshman class of Congress was so large that it passed the first campaign finance reform, and the clean air and clean water legislation. These measures would have been impossible if incumbents remained in power.

Let us clean house and have a chance of saving our future from bankruptcy.


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