A Bong, an IOU, a Favor

While I was stopped unnecessarily on the freeway this morning for President Obama's speech that was less than 15 minutes from my home, I recalled one of my favorite scenes from Dumb and Dumber. It's where the evil kidnapper finally tracks down Lloyd (Jim Carrey), grabs the briefcase and opens it while pointing a gun at Lloyd's head. Instead of finding a suitcase full of ransom money, he finds a bunch of I.O.U's, meticulously accounting for every dollar Harry and Lloyd spent upon learning there was actual money in the briefcase. Lloyd, apparently recognizing the kidnapper's distress, gently picks one of the pieces of paper off the ground and says, in a gentle voice, "Those are I.O.U's, that's a good as money. Look, this one for $250,000 (for a Lambourghini), you might want to hang on to that one..." So classic.

My amusement quickly diminished as I replayed the scene in my head. In the replay, I played the role of Lloyd, my son played the one opening the briefcase (only he wasn't an evil kidnapper), and instead of $250,000 the price tag was $1.5 trillion, and instead of a lambourghini, it was social security. Yep, you can obviously tell that I'm worried about our future generations and the obligations they'll have to face, or not. Todays economic climate is in many ways primal and its given me reason to pause and consider a few random thoughts.

Impact of Today on Future Generations: Economists and politicians have said very little regarding the impact of todays decisions on our children. To what extent are we mortgaging the future? At what point does someone (meaning someone in Washington) stand up and excersise some monetary and fiscal discipline now so that we pay for our decisions, and not our kids? We need to take action and solve the entitlement problem in the U.S., meaning health care and social security. In investing, you are taught to always look at a companys unfunded liabilities (i.e. pensions that are underwater or other obligations they can't meet) and run the other way if they have any. Then that begs the question, why would anyone want to invest in the U.S. with our underfunded pensions, broken social security and medicare programs? Could the U.S. default on its national debt? It's possible, but not probable. I think it would be more politically expedient to pick hyperinflation over default, but I'm not an economist. Time will tell what "kind" of Obama emerges. Will he step up and demand that deficits created from todays debacle be payed back with future suprluses, similar to the EU? Or will he continue to allow politicians make decisions based on the short-term and stick our children with the bill? I'm not saying that's irrational, as the current incentive program enduces such behavior, but we shouldn't expect legislators to act altruistically, better to make it law, which I don't think is probable. But that all leads me to my original soap-box that the problem with politics started when we made it a career.

And another thing. Much has been written about Michael Phelps' bong debacle. Phelps was pictured smoking some herb at the University of South Carolina a week ago. I believe he should definately be more careful as he is a role model but, the amount of outrage over this matter is completely unnecessary. I mean really, even if it is deplorable, is that what we need to be focused on? A swimmer smoking a drug, which to my knowledge, has killed zero people? This seems to be a recent development in America--we're captivated by "breaking" yet useless news which only serves to distract us from other problems we should be dealing with. What's ironic about America's "outrage" is its generally directed toward people engaged in an action that the majority of american's have also participated in, but have not been caught. I love how the news anchors shake their heads in disgust when reporting stories about marijuana use, teen sex, or drunken icons, as if THEY have acted any better (see youtube "newscaster bloopers" if you don't believe me). Anyway, I'm not saying that such actions like those of Michael Phelps or others are acceptable, but I am asking that 1) is that really the most pressing news? Doesn't it just cheapen American intellect? I know that's what sells, but is that the point? To report only what sells? How about what's important? and 2) why should we be accusatory for something the majority of american's have engaged in? C'mon, FOCUS AMERICA! We're too distracted by shiny things--like clearance tags. We love to point the finger and blame other people for their "mistakes". Rhetorical question. Are you saying we are to blame for this mess and not Wall St. executives? I'm choosing not to answer that. But let's scream and throw chairs when discussing their bonuses. Is anyone else concerned that we are outraged at the bonuses of professionals who work in banking (a necessary industry) and not the compensation of professional athletes? Wait, wait, before you respond with "Professioal atheletes haven't caused any harm", I would like you to think about that question (since the two fundamental assumptions can be debated 1) did bankers actually cause today's issues? or did debt hungry Americans and 2) professional atheletes haven't caused any social or economic problems. To which I would say "really?")