Archie Kobain

Greetings and salutations…

Cabo San Lucas
A few of my more astute readers noted that I talked a lot about Todos Santos and not very much about Cabo San Lucas, and that’s because Cabo was “just OK”.  I mean, the place where I stayed for my business portion of the trip was absolutely top notch.  Here are some BlackBerry quality pictures to prove it…

Fiesta Americana Resort - Cabo (Pool)

And, at The Wal-Mart, they had Burger King branded Aros de Cebolla. That’s right, Rings of Onion.  Some kind of a BK orchestrated, Latin American, Funyuns rip-off.

But at the end of the day, if you were to take away the incredible oceans views, rock formations and other natural beauties surrounding the city, it was just another, Mexican tourist town.  I loved the fish tacos at Alexander’s (at the Marina), all the sailboats in the area, and the Mexican people…but I think that my need for fancy resorts and big cities is on the decline.  Todos Santos was definitely more my speed these days.  Of course, that won’t keep me away from New York City next week…  I have a date with David Letterman.

And actually, I think a little Dave Mason would be appropriate here…

Sometime, if I feel like ranting and raving, I’ll tell you about my trip back. This would include details on the my latest round of ridiculous encounters with TSA people and why I think we should be slashing their budget in half.  Which brings me to…  

I guess the BIG topic this week should be The Debt Ceiling.
But you know what really bugs the crap out of me? 

Well, other than that guy’s name is Boehner.  <Heh, heh… heh.>

Most people have no idea what this whole debt ceiling thing is about, why it’s important or even relevant, and/or how any of it could affect the average person.  The reality is that most people just want this sort of thing to go away. Why should we care if the national debt goes up?  It’s already at 14.3 trillion dollars and, as far as we can tell, that hasn’t affect us in the least, so why not go for broke. Make it an even 20 trillion.  Right?

So, let me take a stab at this.  First off, there are people who think that having a debt ceiling is silly.  Why don’t we just get rid of it?  The debt ceiling is nothing more than a made up number that says that the U.S. will not borrow anymore than than this amount of money.  It’s like having a credit card with a credit limit, except we get to set our own legal credit limit.  Although doing business could certainly be easier without that ceiling, not having a debt ceiling would just allow for unlimited borrowing without anyone really noticing our looming troubles …and looming, they are, in a big way.  Our country has been, basically, having to raise the debt ceiling about every six months (or so) for years.

What no one realizes is that, global governmental spending works exactly like your own household finances, just with more zeros at the end. Let’s pretend that you have a credit card that you use sparingly, mostly for times when you don’t have cash.  Then, every month, when your bill comes in, you pay it off and you have some money left for other things, like paying your mortgage, your car and having a little beer and tequila. Good stuff.  You are living the life.

Then one day you realize that you’ve put a little too much on your credit card. You could pay it off but that would mean not having as much money for beer and tequila. Well, you’re an American. You deserve your tasty beverages and, therefore decide to, instead of paying off your debt, start running a balance. Of course, you are sure that you’ll be paying it back down to zero soon enough.

Next month rolls around and you’ve over spent again. Plus now you have to pay interest on your credit card balance from last month. That’s OK. It doesn’t appear to be too much. Your balance is small. Besides, friends are coming over, they heard you have the best tequila collection in town.  Don’t worry, they are bringing the beer.  So, to not change your lifestyle, you let the credit card balance grow a little more and the problem compounds itself.

After a while, your credit card balance hasn’t seen zero in a long time. Whenever cash comes in, you send it all to the credit card company. That means you don’t have any cash, so everything that you buy, you need to buy with your credit card. It’s a vicious circle.

If you let this continue, sooner or later you’ll notice that you are spending more on interest than you are on beer and tequila.  Normally, I would recommend getting all of your bills paid and your credit card balances paid-off before spending one more dime on yourself but… This whole scenario could be pretty hard to face without plenty of beer and tequila.  Are you following me?

Fortunately, the credit card companies, in their infinite wisdom, set a credit limit on your cards.  They are saying, you can’t borrow more than this much. They are saying, if you were to borrow more than this, we don’t think you’d have the ability to ever pay it back.  Gee thanks!

So this is exactly what our government has done.  America has spent all of its cash and we’ve been borrowing more and more.  So far our creditor have loved us.  It’s like auto-pay…they get their money.  All this borrowing is costing us huge dollars. Our Net Interest on Debt is now our nation’s 5th largest budget item. But we keep spending and spending…money that we don’t have, which drives up how much we pay in interest…because we’re spending borrowed money.

The scary thing is that we can arbitrarily raise our debt ceiling and agree to borrow more. However, our global creditors aren’t stupid.  They know that we should, by all rights, have a credit limit and they know that we are very close to what that credit limit should be.  They know that if we borrow much more, we will never be able to pay our debt down.  And when that happens, there will be a whole new set of problems…

I know I’ve included this link before but…  Check it out.
Just bring this up and stare at it for a little while.  It’s mind-boggling.

U.S. Debt Clock

First, our credit rating will go down, which means our interest rate will go up. I’ve always found it funny that those who can’t afford to pay, pay the most. We are obviously not a communist society.  Then of course, who is?  Not the Chinese …but that’s a topic for another time.

Next, at some point, no one will loan us any more money, regardless of our self imposed debt ceiling.  Talk about a government shut-down.  If we don’t start working towards a balanced and cash-flow positive budget, this will absolutely happen in the next 20 (or so) years.  This is something no one wants.  Don’t forget, we’re everyone’s best customer.  What happens when your best customer has their credit lines shut off and they don’t have any cash?  Salespeople?  That’s right.  You can’t sell them anything.  So this will be bad for everyone.

We gotta fix this boyz!  We have to make some tough choices. We have to stop spending.  We have to eliminate our debt and return to being a debt free society. Part of how we must do this is by reducing the trade deficit.  Let’s start making everything that we need right here in America, even if it costs a little more.  That will keep people employed and keep our cash in the hands of Americans. We need to lose our dependency on oil.  I believe the only reason we have such a dependency today is because we have been manipulated by the big oil giants and the automotive industry.  Let’s start building cars that don’t require gasoline. Right now!

Let invest in companies like Cyclone Power Technologies in Pompano Beach, Florida. They’ve already developed an engine that runs on almost any fuel or combination of fuels.  They are cleaner, safer, and more efficient!  It’s basically a mini steam engine powered by things that don’t send our money into the pockets of Texan billionaires, Saudi Arabians, and other BP-like conglomerates.

Let’s make it easy for companies to do business in the US, if they are located in the US, so they employ our people and keep our money here.  Let’s watch out for sneaky foreign companies who appear to lose money here every year, so they don’t have to pay US taxes, while the corporate offices in Japan rake in piles of cash.

In other words, let’s stop taking it up the poop chute.

Ram it, ram it, ram it, ram it up your poop chute
Ram it, ram it, ram it, ram it up your poop chute
Don’t fool yourself girl, it’s goin’ right up your poop chute

Fortunately, I’ll be rounding up to 100 soon and looking forward to spending my days deciding where to drop anchor, how to make my own tamales, and whether I prefer rum or vodka in my guanabana smoothies.

What’s your plan?

Cheers!  Love ya.  Mean it.

– Arch