If Bozo the clown offered financial advice, you’d consider yourself foolish for taking it. This week our education leaders lined up like Larry, Moe, and Curly to offer three equally clownish solutions.  We had clowns coming out of the white house car. We had dancing bears in the Senate.  I think I saw a bearded woman in the US House of Representatives.  The three solutions and the ultimate compromise would have been better if Bozo had authored it.

Getting out of debt is hard. It takes real hard work. As Moody’s (the credit rating company for the US) assessed the two plans, they concluded that both plans are basically worthless. Why would they say that?

Well, look at this verse from proverbs in four translations:

New American Standard Bible (©1995) There is precious treasure and oil in the dwelling of the wise, But a foolish man swallows it up.

American King James Version There is treasure to be desired and oil in the dwelling of the wise; but a foolish man spends it up.

Both of these versions say that there are wise ways to deal with money and foolish ways to handle your books. How can you know who is a fool and who is wise? Wise people have treasure in their dwelling. What does that mean? They have savings. They hold back some of today’s money for tomorrow. The foolish spends all they have and then some.

Wise: Not spending all of today’s money so you have some for tomorrow

Less wise: Only spending today’s money completely, but not spending tomorrow’s money

Foolish. Spending today’s money today plus tomorrow’s money today.

Immoral: Spending all your today and tomorrow’s money today, and then spending someone else’s money today too.

If you are spending all your today’s money and not saving and money, STOP.  Spend less. Create an emergency fund. Start savings some money for a rainy day.    Realize the loss of personal liberty as you spend money on “yesterday’s purchases.”   Realize how foolish it is to only pay the minimum payment on a credit card -forever enslaving you to credit.    Make a plan to get wise.   By all means, don’t follow the example of Washington.   They’ve decided to run up all their credit cards to the tune of 14.3 trillion and then their “plan” is to keeping making the “minimum payment” by…    Taking out another credit card.   Surely that is only temporary, right?  They must have a real plan to back out of this mess.   Surely, Donkeys and Elephants can agree on MATH, right?  Hmmmm…..?

So let’s line up the plans offered in Washington to the Bible. Which ones are immoral, wise, foolish, and somewhere in between?

Reid’s plan: Immoral. Pretend to cut money, but really a “cut” is not expanding the current plan to raise spending annually. So keep spending our children’s future earnings and elderly’s past social security payments. Keep spending more than we can afford on top of the 14 trillion we have already spent. The plan isn’t even remotely an attempt to curb spending at any level.

Boehner plan: Immoral and Unwise

Though it’s been reported as some radical savings plan, Boehner’s plan is equally silly and foolish.  It is -as was reported earlier this week- “His plan will never balance. In 10, 20 years, there isn’t a significant change in policy that will ever balance the budget. So I can’t vote for any plan that doesn’t balance. The Boehner plan also will add $1 trillion to the debt over 10 years. Albeit that’s $1 trillion less than the CBO baseline, but it’s still $7 trillion of additional debt. Every year under the Boehner plan, we will pen more and borrow more and the debt — we will spend more and borrow more and the debt will grow. Boehner plan in 10 years, will be 21 trillion. It is too much. It doesn’t change the trajectory we are on.”

So the politicians have combined a foolish plan with an immoral plan and are trying to sell it as a “successful” compromise.   Washington is completely unaware of what a “cut is.”  They keep following the foolish model of spending all they have (and then some).

A cut means you spend Less next year than you spent this year.

A cut is not spending less next year than you planned to increase your spending next year.

This is how politicians do cutting. They say, “We were planning on increasing spending with inflation, blah blah blah each year by 2%, so instead of increasing the spending as we planned by 2% yadayadayada, we will “cut” spending by only spending 1.78% next year.

That’s an increase, not a cut.   There are no serious plans that remotely qualify as “cutting the deficit” at all.   Do not be fooled by either party. Both refuse to really move from foolish to wise.  We are not choosing between the blue bill and the red bill.   We are choosing between Moe, Larry, or Curly.    So Uncle Sam has a choice:  Foolish or Immoral.  Or a combination of both.   At the end of the day…   All our leaders did this week was “take out another” credit card for our country.  We will lose our AAA credit rating. We will continuing hurting the economy through inflation. We will continue to see gold grow annually.

For more information, check out www.godonomics.com