The world sighed in collective relief last night, but now we are waiting for the Senate. It's bad enough that our insurance and investment demons are world-class villains. It would have been the punch in the nose to default on our debt now - a horrific Congressional "do as we say, not as we do," considering the legislative sobriety pumped into the consumer credit crisis.
Key point: the federal debt ceiling and haircuts - I had what I thought was an original* USA Brand metaphor to explain that we should spend smart, take care of the poor and needy, and play fair. When I travel, I discuss our unique brand of fairness and due process. Staying true to this brand will solve a host of disagreements on Capitol Hill.
So, is temporarily raising the debt ceiling smart? It is for the short term on a cost-benefit analysis. Default on debt = interest rate escalation, just like if you miss the five o'clock deadline on your credit card payment again.
Our brand is not about materials and celebrity, though I think regional opinion will vary on popular themes, equating our brand as representative of having a lot of money, McDonald's, John Stuart, Steve Colbert, Lady Gaga, and the U.S. Military. In reality, our brand is about civil liberties and Constitutional guarantees. We export the concept of transparency in government. We police our crooks and guarantee the most unworthy miscreant of the lot due process of law.
I believe that the President and Congress are on the right track and now have the right framework.
(1) They have a deadline (noon - August 2nd). That's in 15 minutes.
(2) They have short and long-term goals (keeping the country's financial recovery on the mend, putting off the debt until 2013, and getting re-elected in 2012).
(3) They know what this country means as a brand internally and across the globe, and they all preach it in their own terms (i.e., certain unalienable rights). Listen carefully to the floor debate and press conferences.
(4) They have a budget and a pretty good understanding of how much revenue comes in, and how much expense goes out....cut $2.4 trillion from the budget over 10-years.
Our political formula is not a company secret; Congress can work out a plan that considers the interests of the haves and the have-nots, however defined. The Courts will handle their end of the bargain balancing those interests.
*Someone beat me to the "brand" punch, but I am pleased to believe I came up with it on my own, and the salon owner can vouch for me. But, for a great read on the topic, please see this well-written blog: http://thethoughthole.wordpress.com/2011/07/14/the-federal-debt-ceiling/
Conclusion: "There is plenty of money, it's just about where one decides to spend it." Let's hope that Congress gets it right for now, and whatever is ultimately decided regarding the debt ceiling, let's keep true to our brand of liberty and justice for all. And thank you, my son's hair looks great.
