Gotta say this about Bush: he's stubborn to the core:
Signaling a new flexibility on issues in the wake of the Democrats' wins, Bush said he is willing to discuss Democratic ideas for solving the Social Security problem, including tax increases. "I don't see how you can move forward without people feeling comfortable about putting ideas on the table," Bush said when asked about the prospect of tax increases to keep Social Security solvent. "I have made it clear that I have a way forward that can do it [without raising taxes] and I want to hear other people's opinions."
The only thing that's clear is Bush doesn't understand the concept of debt.
Of course Bush has clear ideas about Social Security. Who could forget this gem?
"Because the—all which is on the table begins to address the big cost drivers. For example, how benefits are calculate, for example, is on the table; whether or not benefits rise based upon wage increases or price increases. There's a series of parts of the formula that are being considered. And when you couple that, those different cost drivers, affecting those—changing those with personal accounts, the idea is to get what has been promised more likely to be—or closer delivered to what has been promised. Does that make any sense to you? It's kind of muddled. Look, there's a series of things that cause the—like, for example, benefits are calculated based upon the increase of wages, as opposed to the increase of prices. Some have suggested that we calculate—the benefits will rise based upon inflation, as opposed to wage increases. There is a reform that would help solve the red if that were put into effect. In other words, how fast benefits grow, how fast the promised benefits grow, if those—if that growth is affected, it will help on the red."—Explaining his plan to save Social Security, Tampa, Fla., Feb. 4, 2005
I'm sure he's learned alot since then. But if he has, he ain't telling. Bush has shamelessly promoted a borrow-and-spend culture since the Supremes put him into Office, and there are no signs that he's going to stop anytime soon.
What this means for us is that the culture of debt will continue to exist and invest our society. A total of $63.6 billion will be spent via credit card before this holiday season is over, and that's not the worst of it:
According to the magazine's latest shopping survey, nearly one out of every four Americans will not pay off their holiday credit card debt until March or later, letting about $14.6 billion in interest-accruing debt pile up. That's a lot debt.
And Bush has the audacity to say that $100 here, $250 there, will solve America's problems with debt? Hardly. If anything Bush's plan will plunge thousands more Americans into debt, and make those in debt worse off. One of the dangers with credit card debt, as any college student can tell you, is that when you miss that first payment (or more) those nice, friendly people over the phone change their tune. After all, you did borrow their money, and now they want it back (with interest). Luckily for Bush, he likes borrowing from future generations who either don't exist yet, aren't old enough to vote or aren't that influential in today's political circle.
I'LL BE MORTAGING THE HOME FOR CHRISTMAS
Sadly, it's not just individual holiday shoppers who's getting hit. Small businesses are also feeling it:
Credit card debt is not just a concern for consumers. According to a new report by the Small Business Administration, plastic is one of the main reasons the number of small business carrying debt increased 25 percent last year.
From June 2004 to June 2005, the number of businesses with outstanding loans under $100,000 jumped from 15.2 million to 19 million. A full 70 percent of that figure was due to credit card debt, the study found. Despite the dramatic increase in numbers, the total dollar amount increase was a meager 1.9 percent -- suggesting a growing number of companies are using credit cards to cover smaller expenses.
Despite the slowdown in other areas of small business lending, the ''small business credit card market continues to be quite dynamic,'' said Chad Moutray, the chief economist for the SBA's Office of Advocacy.
The agency surveyed 8,799 banks and studied business loans of up to $1 million to develop the snapshot. Overall, the study found there were some 21 million small companies holding loans of $1 million or less in the United States. The total debt load for those companies was about $600 billion -- up 4.1 percent from the previous year.
There's a real incentive for banks to push credit cards on small businesses, though. Check out who runs Visa, MasterCard and American Express. A story I caught last year talked about how these credit card companies have experienced a 150% increase in penalty-fee income since 1998! Yet you'd be hard-pressed to find a speech where Bush or his administration admonishes the credit card industry or the banks for encouraging a debt-addicted culture.
IT AIN'T PLANES OR A RYDER TRUCK
Yesterday a guest blogger for ThinkProgress reminded us about what the real threat to the American standard of life is:
For most of the past three decades, the current account was in the deficit, largely because imports were larger than exports. Now, we also pay more in interest to the rest of the world than we earn on our assets abroad, adding to the deficit.
A current account deficit means that we spend more than we earn. To pay for this, we borrow from the rest of the world, most importantly by foreigners financing 78 percent of our budget deficit. As a result, we send a lot of interest abroad. In the third quarter of 2006, the federal government spent $37 billion — or 1.1 percent of our economy - on interest payments to the rest of the world. Now, we actually spend more on interest payments than we earn. The last four quarters have been the first time since the government has collected these data in 1960 that this has happened. With trade deficit continuing to be large, we will add more to our debt and interest payments abroad will continue to rise.
Why is this bad? At some point foreigners will not want to lend us money at low interest rates, especially if an ever larger share of U.S. income is dedicated to interest payments on international debt and not on important investments, such as education or health care. Already, Japan — the largest foreign creditor of the U.S. government — has slowly been selling off its T-bills. If other countries follow suit, interest rates will go up to attract more money to the U.S. This means higher mortgage and credit card payments for families, but also less investment by firms, all of which spells less growth and fewer jobs.
Of course, Bush won't mention this tie-in as he tries to fool the American people again. It's so much easier to blame slow growth on taxes and evil pixies. We can only hope that foreign investors are more sympathetic to us than we've been to each other; at least other countries just up the ceiling when the nation reaches it's limit and can't pay. Try doing that to a credit card company.
DEBT HAPPENS
After I graduated from college, I three of my four credit cards were maxed out and I had no job. When I eventually got my first job, I was hardly making enough to pay off my debt (this happens alot) so I had to do the next worse best thing: pay the minimum.
I'm proud to say that, six years since leaving college, all my credit card debt is gone. But it wasn't easy: I had to call the companies almost daily in the beginning, and even when I made some reasonable deals I still had to make personal sacrifices (I had made a promise to never oay just the minimum ever again). I know people who graduated the same year I did who are holding down two jobs just to get rid of their debt.
So when I see Cobra Commander say anything about money, I have to laugh. Moderation and awareness are not words used to describe this president. He's never had to pull out his own wallet when he got into trouble; DaddyBush always bailed him out. And now he thinks he's an authority on finances? Give me a break. If his website is accurate, he hasn't had a new thought since August '05, and I'm pretty sure things have changed since then.
Now excuse me while I go get a couple of Playstation 3s.