An exchange between me and an anonymous commenter that's below my last post got me thinking (for once, some of my readers would add, lol). My correspondent is justifiably concerned about the federal debt, its potential impact on interest rates and wants to know at what point the national debt becomes a concern to me. Anonymous went on to defend Congresswoman Kristi Noem's vote to shut down the government last October. I'm glad to share the commenter's opinion and my reaction, both of which are presented in full, below. On reflection I did some thinking on his Q about the point at which I get concerned about the national debt. As a reasonably successful businessman of many years standing I know one thing about debt, both public and private: it should never be lightly regarded and has to be kept at the top of the mind at all times.
That seems axiomatic to me, but there's a corollary: Single-minded focus on debt can take too much time, attention and energy away from building the revenue-producing assets that service and reduce that debt. Since World War II we've had several episodes when the national debt reached levels that seemed alarming at the time, but during each of those episodes the power of the American economy and its unstoppable trend toward growth reduced--if not the dollar amount of the debt--the size of it in relation to the nation's economy, rendering the debt/doomsday hysteria of those eras a passing memory, forgotten all too quickly. That Congresswoman Noem chose to close down the government once and voted twice to deny the United States Treasury its ability to service the nation's financial obligations by rejecting a debt-ceiling increase only tells me that the lessons of history have been lost on Noem, if ever she knew about them in the first place. More troubling to me is Senator Thune's recent vote against raising the debt ceiling, particularly since I've been a supporter of his from day one--having given a much younger and unknown John Thune who was running for a GOP nomination to Congress in 1996 his first public exposure in Pennington County. I took him to be a level-headed pragmatist commited to doing what's best for South Dakota. Apparently I was wrong: level-headed pragmatists don't support the self-destructing financial turmoil that results when they bare threats of disabling the government or shutting it down altogether.
Without assessing their political motives, I can say that both Noem and Thune are guilty of legislative overkill. The built-in resilience of the American economy should be nurtured by elected officials, not thwarted by them. And just how resilient is the American economy? Don't take my word for it. Here's what the man himself, Warren Buffet, said yesterday to his shareholders in his annual letter to them: "America's best days lie ahead . . . I have always considered a 'bet' on ever-rising U.S. prosperity to be very close to a sure thing . . . the mother lode of opportunity lies in America." Buffet's Berkshire Hathaway, since 1965 one of the most astoundingly successful financial ventures in the history of the United States, went "all in" to the stock market in 2009 at the depth of the bear market on a "buy American" spree that speaks for itself in terms of success.
I wish our elected Republican reps could show as much faith in the American economy. Turning their attention to debt reduction at the expense of finding ways to grow the economy has become an obsession. I like when members of my party fight for business-friendly legislation meant to increase efficiency, reduce regulations, open markets and convert tax liabilities into productive avenues for growth by reducing them as an incentive for re-investment. I hate when Republicans go into debt-hysteria mode and do dumb things like shutting down the government. Why is it so hard for them to get this?