Time to wise up - #Money matters

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The Joplin Globe <-- source

Almost every adult and business in America borrows money. Borrowing in and of itself is not bad, at all. It provides a way to improve our standard of living, individually, and the ability to make money and thus grow financially for businesses. Wise borrowing implies wise investment of that money provided by someone else to improve things, in general. And it has worked for a long time for the United States.

However, the use of borrowed money to do things that do not improve our conditions in life is not wise or prudent. Take a prospective student who borrows money to go to college but then drops out of the educational improvement sought. His or her return on investment— investment for a college education that certainly stands a good chance of improving the student’s life — is less than originally expected.

The same applies to any business that borrows money to purchase another business or expand the original business with the end result being no improvement in the financial condition of the business.

The U.S. government has borrowed money, over the past 10 years, at an astounding rate. We have tripled our total national debt ($5 trillion to almost $15 trillion) over that short period of time.

But we have not grown financially enough to justify the money borrowed. Our national condition has in fact been severely downgraded during these past 10 years in any meaningful financial frame of reference, including the value of the dollar internationally, growth in our production of goods and services, unemployment rate, etc.

Many will say such actions by individuals or businesses are “throwing good money after bad money.” We believe such a critique applies to the federal government. That government has not used borrowed money wisely. Such a view is based on clear metrics of growth, improvement in education, standard of living for many, and now our ability to defend ourselves as well.

Now, after failing to use our borrowed money wisely, it may well be the case that it will cost more money in the future to borrow money.

Executives in business get fired for such unwise financial decisions. Individuals go bankrupt or their standard of living plummets when that happens.

Our rather simple conclusion is that it is time for our national leaders to “wise up” in the way we use our borrowed money.