Debt Ceiling Mistakes All Around: I Call B.S.
So . . . Standard & Poors, which didn't downgrade all those mortgage-backed securities in the run-up to the housing bubble meltdown, found the stones to downgrade, of all things, U.S. treasuries?
I call B.S.
But first, there are a lot of mistakes to go around, starting with my own. My mistake was allowing the stop-loss orders on my 401(k) stock holdings to expire while all this debt ceiling madness was going on. I was preoccupied with other things going on in my life and just didn't pay attention. The unrealized gains on my 401(k) holdings took a major haircut from 29% to 8%. Nothing to do but ride it out. Had I had my stop-loss orders in place, I could have gone back and re-bought all my perfectly good holdings for a lot less, in essence shorting my own stock portfolio. I've got another fourteen years to ride it out, but lesson learned: Always keep your stop-loss orders in place so when stupid people panic and sell, you're not stuck talking about unrealized gains instead of realized gains.
Second, I blame President Obama for even negotiating the debt ceiling increase with the Tea Party Terrorists in the first place. Yes, I said it: Tea Party Terrorists. Mind you, I have friends in the Tea Party and I respect that they've done more than just talk -- they get out and support their candidates and hew closely to their principles. But to hold the debt ceiling hostage and create unnecessary worry in the markets? I call B.S. But the President should have never even deigned to negotiate the debt ceiling increase. He should have simply said, "No president before me has ever negotiated the increase of the debt ceiling that is an inevitable result of Congress passing a budget that requires greater revenues than our taxes provide. I'm not going to be the first." The off-the-record remarks should have been, "Oh HELL no, the first (real) Black president ain't going out like that. If Congress doesn't raise the debt ceiling, I will and let them fight it out with the Supreme Court."
Third, I blame the Tea Party and the Republican Party. Republicans, I know and like a lot of you, but your Tea Party is out of pocket and you need to get them in check. There is no way any elected official with any sense of statesman- or stateswomanship would have let the debt ceiling negotiations go for so long and so cattywhampus to the detriment of the entire nation. This whole thing was nothing more than an effort to embarrass and weaken the President, otherwise the spending would have been cut from the budget. Do you folks hate President Obama that much that you'd stick it to the rest of the nation to prove some point? It's a good thing I'm paying off my credit cards and my mortgage is a 30-year fixed, otherwise you folks would have to get a restraining order against me, especially the Tan Man (Boehner) in all his glorious ineptitude.
But I also blame Standard & Poors. Even as bass-awkwards as our political system has become, do you S & P asswipes really think France has a better chance of paying off its debt than we do? Really? Where were you guys when people with no jobs, a 500 FICO score and a barely discernible pulse were able to get no doc, interest-amortizing balloon mortgages for houses they could not afford? So, those folks were a good credit risk but the good ol' U.S. of A., which has never defaulted on debt, gets a markdown because of temporary insanity in Congress? I call major B.S.
Finally, I blame us as a nation. This recession was a man-made injury created by ignorance and greed. A lot of people are going to come out of it with lower incomes and lower net worth because many of the jobs we lost here in America aren't coming back. America, we used our homes as ATM machines and monuments to our own financial ignorance, and we allowed corporate America to pimp us, run with the money, and leave us -- as individuals and as tax-paying citizens -- holding the bag. All that quantitative easing and TARP money is just more debt on our national credit card.
And China is so not going to give us a limit increase on that credit card.
Time for Americans to wake up and play smarter, not harder, with our finances and our politics.