Fiddling While Rome Burns
Like most financial professionals, I have a thing about numbers. I am often amazed by what numbers can reveal – how they can tell a story, indicate a trend or expose a looming problem. Right now our nation is looking at a set of numbers that should serve as a wake-up call to any responsible CFO or conscientious corporate officer.
The U.S. has a $1.3 trillion deficit. We have $14.3 trillion in debt, and that figure is projected to grow to $20 trillion at current course and speed over the next few years. Most economists believe the U.S. economy will grow at 2% or less this year, while Europe, our largest trading partner, is expected to contract by an alarming 0.5%. We remain mired in persistent 9.1% unemployment, and we need to create about 125,000 jobs a month just to absorb population growth.
Our nation’s balance sheet is way out of balance. Congress was not able to agree on how to curtail government spending because most of their discussions focused on the debt ceiling, and as a consequence our nation came to within about a day of running out of cash.
Think about the business that you are responsible for and ask yourself, “What would happen if I allowed my company to come within a day of running out of cash?”
We now have a Congressional committee engaged in a process called sequestration. If this committee cannot find $1.5 trillion of expense reductions and/or revenue improvement, we will once again find ourselves on the brink of financial calamity.
In my judgment, this is professionally irresponsible. Sadly, our government appears to be putting politics ahead of fiscal responsibility in addressing both our problems at home (unemployment, debt, balance of trade, and state budget shortfalls) and the very real economic threats we face from abroad.
Rather than coming together to develop a coherent policy to set America on a path to economic sustainability, they are, like Nero, fiddling while Rome burns. I believe this is an abdication of professional responsibility by our country’s leaders.