Bad Managers. . .

(Bad Managers. . .)

Hoe many stories are there when there is a winner of a multi-million-dollar lottery only to be broke a few years later ? Or a trust fund kid who had a million dollars inheritance only to have spent it all and then, God forbid, have to get a job ? There are probably more money mis-managers than there are money managers. One of those in the former category is the Biden Administration because, as it is now a lottery winner or a trust fund kid, the credit rating agency, Fitch, downgraded the U.S "credit" from AAA to AA+.

This had happened before under the Obama Administration and for the same reason; too much spending and no political mechanism to curtail the excess, namely the inability of Democrats and Republicans to reach any compromise because the fiscal aims of each Party are not compatible. The Biden Administration has been the author of current economic conditions, the President is proudly calling it Bidenomics. Republicans in the House have stated the goal is a return to fiscal order but now, the first part of August, 2023, has yet to pass a single Appropriations bill and the Fiscal Year ends on September 30th. And that is not countering recesses or distractions like any impeachment hearing.

The debt held by this country is over $30 trillion. In time, interest on this debt will exceed the gross domestic product and will be paid at a higher interest rate. One can recall how in Weimar Germany, hyper-inflation got to the point where Germans had to use wheel barrows to haul thousands of all but worthless Deutschmarks just to get a loaf of bread from a local market, The federal reserve can monetize this debt but that too causes inflation, perhaps not as bad as in 1920's Germany but it is still a problem for day to day existence.

There was once a remark that the myth in Washington D.C. was that there was a Party committed to fiscal responsibility. Democrats want social welfare and Republicans want the Pentagon. Each side had been accommodating, to this point at least. In the House of Representatives, Speaker McCarthy has promised a good-faith effort to manage the nation's budget and to present in turn the Appropriations' bills but as mentioned, the fiscal year ends in two months. Whether the House is successful it what it had said it would do,

The Dollar ($) is at risk as the World Reserve Currency. Beijing as opposed to Washington is not running deficits and its own public debt is considerably smaller and they do not have budget debates like in this country. That being said, China is still the junior "partner" with the U.S. economy still considerably larger. But that state of affairs cannot persist if defined fiscal policy is chaos.