In today’s complex financial landscape, clear thinking and logical conclusions are both rare and essential. As many have experienced, navigating the challenges of large projects often feels chaotic, punctuated by unforeseen complications and budget constraints.
Those who have encountered the frustrations of mismanaged expectations or project delays understand that professional environments can be highly unpredictable. Any minor setback, whether caused by a detail-focused team member or external factors like regulatory changes, can significantly impact timelines and finances.
Yet, these turbulent experiences can provide valuable lessons, revealing opportunities for personal growth and resilience. Over the span of more than two decades as project managers at an international consulting firm, we’ve been immersed in an industry where winning and losing projects is just part of the everyday routine.
Many who have participated in this line of work will agree: it can be a challenging field. Nonetheless, the personal development gained through these experiences is invaluable.
For instance, one brisk fall morning back in 2009, a client furiously waved our report in the air and declared, “this is crap on paper!” After emphasizing his point with further gestures, it was clear he felt quite passionately, despite the report being essential for the project’s progression. Such is the unique reality of working in consulting.
Box-Checking Nonsense
One memorable instance involved a client casually munching his chicken salad while informing us we had “the significance of a gnat on an elephant’s behind.” This remark came on the heels of being accused of derailing the project—a stark contrast.
We have dealt with unreasonable escalations to project schedules and have often been criticized for late submissions, despite experiencing frequent pressure to expand project scope without appropriate budget adjustments. Our efforts to create exemplary deliverables have sometimes been met with indifference, akin to the reaction a congregation might have towards a sermon on tithing.
If you’ve never encountered this situation, it’s similar to watching a wad of cash burst into flames—money gone in an instant with nothing to show for it.
Another client bluntly dismissed the project management table we presented by stating, “tables are for idiots.” While the words stung, they also offered valuable insight.
His argument went like this: “Anyone can check boxes in a table, but are those completing the table genuinely reflecting on their answers? Are they validating their responses or simply marking a form as done?”
Unfortunately, the world is rife with individuals who merely check boxes without engaging critically. A significant number of such individuals also inhabit the halls of the U.S. Congress. One glaring example is the ongoing debate over the debt ceiling.
The Absurdity of the Debt Ceiling
On the 13th of January, Treasury Secretary Janet Yellen sent a letter to Congress, alerting them that the statutory debt limit of about $31.381 trillion would be surpassed by January 19. Following that point, the Treasury would need to implement extraordinary measures—essentially budget tricks—to avoid a government default.
The debt ceiling represents the maximum amount the U.S. government is allowed to borrow to cover its existing commitments, including essential services like Social Security, Medicare, and military pay.
It’s crucial to note that the debt ceiling is a legal constraint set by Congress—not a reflection of the government’s budget. Congress, despite its penchant for overspending, must raise the debt ceiling to permit the Treasury to borrow funds required to meet the financial obligations it has already approved.
Do you see the folly in this?
This system inevitably leads to partisan strife, particularly in the current climate, where a Democrat occupies the White House alongside Republican control of the House.
As we speak, House Speaker Kevin McCarthy and his Republican counterparts are gearing up for a standoff with President Biden, trying to leverage spending cuts and other political concessions in exchange for an increase in the debt ceiling. This process must conclude by June, when Yellen anticipates exhausting her extraordinary measures.
The political drama in the months to come is bound to be captivating; however, the reality is simply absurd. The debt ceiling will likely be raised—just as it has been countless times before—while Congress carries on its reckless spending spree. Here’s why…
Why Debt Ceilings are Absurd
The ongoing devaluation of the dollar stems from decades of irresponsible currency management. This process occurs with the collaboration of the Federal Reserve and the Treasury. The Federal Reserve creates credit out of thin air, which the Treasury borrows before expending it.
The Treasury spends this borrowed money on the whims of Congress, which continues to approve financially untenable policies that amplify poverty for the middle class while concentrating more wealth into the hands of a select few. Congress maintains this cycle of borrowing and spending without restraint.
Currently, the looming debt ceiling debate marks the anticipated elevation of the debt limit for what might be the 79th time since 1960, symbolizing yet another chapter in the great decline of the USA. According to the government’s own inflation calculator, a dime in 1960 holds the same value as a dollar today.
What happened to the remaining $0.90?
It has been eroded by Congress’s actions, alongside your savings.
By allowing the Treasury to access credit through debt ceiling increases, Congress enables the very spending it plans. Consequently, the Treasury utilizes this “printing press” money in an array of welfare and warfare programs.
As new money circulates within the economy, and its supply expands faster than goods, prices naturally rise. This mechanism is not complex.
As long as Congress continues to raise the debt ceiling, the U.S. government can technically avoid defaulting on its obligations. However, in perpetuating more debt, with the Federal Reserve and Treasury’s assistance, Congress is effectively diluting the currency.
The reasons for this ongoing spending crisis are numerous, yet the main issue remains that the debate around the debt ceiling emerges only after spending has already occurred.
This backward approach to managing spending is misguided. Effective budget planning should take place before any money is disbursed. Yet, the allure of easy money renders fiscal responsibility impossible.
Hence, debt ceilings are inherently foolish. It’s not that there shouldn’t be limits on borrowing; rather, perpetually raising the ceiling has devolved into the nonsensical ritual of indiscriminate box-checking.
[Editor’s note: As signs of an impending recession become increasingly apparent, investors who are unprepared may face significant financial losses. However, there are strategies available to weather the storm and even emerge ahead. If interested, consider examining my Financial First Aid Kit, which includes crucial information to help you navigate this transition while safeguarding your wealth in a declining global economy.]
Sincerely,
MN Gordon
for Economic Prism
