THE END OF TRACK

There's nothing more certain than a speeding train approaching the end of it's rails. It's inevitable what the outcome will be. There's no discussion, no debate, or any other rationalization. The end result is cut and dried. No one will argue that a railroad track laying crew will magically appear, and with superhuman effort, quickly lay enough track to keep the fast approaching train from derailing. It's not going to happen, the train is going to wreck, and it's going to be ugly!

I often think of this hypothetical train wreck as an analogy of this country's short sighted monetary policy decisions. Who in the world, if at the controls of a speeding train, would say something like "trust me, I know what I'm doing", and then, open the throttle even wider as the train quickly approached the end of track. The similarity between the speeding train, and the government's history of spending more than it takes in, is simplistic in nature, however the comparison is about as close as it gets regarding the eventual outcome of both scenarios.

The question of viability for the Social Security program has been debated for years. The almost universal opinion is that we're fast approaching the point where the fund will not be self sustaining, and payouts will exceed income. The only issue where opinions differ, is when that point in time will come. Folks on both sides of the aisle have been kicking this can down the road for years. The sad part of the story, is the fact that our speeding train drivers have been raiding the Social Security fund for years, and in place of the money removed for other expenditures, the fund is now full of government I.O.U.'s. If any private pension manager tried the same tactics, he/she would quickly be put behind bars. Can anyone say "Ponzi or Madoff".

Within the Social Security context, I curiously watch the debate currently taking place in Washington regarding the highly touted payroll tax cuts. The Obama administration, public opinion, most political pundits, and a majority of the news opinion seems to agree, this is a good thing, and that it should be extended well into the future. What no one is talking much about, is the fact that on every paycheck, the government will continue to get approx. 4% less in funding for Social Security. The short sighted viewpoint is that it's more money in every one's pocket, and there's very little discussion about the decrease in revenue for the Social Security fund. This deficit spending mentality is what got us into this mess in the first place, and is exactly why Europe is making the news broadcasts almost every day.

The good news is that there are an increasing number of politicians who despite being demonized as too negative toward unfunded mandates, are starting to get the public's attention. The future, particularly the future of our kids, and grand kids are at stake. If the politicians continue to sell out the future of this country with a fiscal policy that puts everyone in jeopardy, then history will eventually be the final arbiter. I suspect it will be written that the engineer politicians should have pulled back on the throttle before America's train reached the end of the track.