Here’s the definition of irony – Ford and General Motors potentially asking George Bush for help fixing their balance sheet problems. Has George Bush ever looked at the balance sheet of the country he’s in charge of?
According to the Wall Street Journal this morning:
In an Oval Office interview, Mr. Bush said that his administration has discussed the development of new fuel technologies with the nation’s top two auto makers, which might make them more competitive, but that he has had no talks about the companies’ finances.
Asked if he had spoken to GM Chairman and Chief Executive Rick Wagoner or Ford Chairman and CEO William Clay Ford Jr., Mr. Bush replied: "Not about their balance sheets." He added: "And I haven’t been asked by any automobile manufacturer about a bailout."
George Bush has never seen a spending bill he didn’t like and Dick Cheney thinks that deficits don’t matter. From increased medicare to homeland security to the war in Iraq, Bush has made a mess of the US’ balance sheet. The current administration has spent more money than every other administration in the history of the United States combined – even Ronald Regan’s. The US public debt has increased from $5.6 trillion to $8.1 trillion since the current administration has taken office.
While I’m not a perma bear who thinks the debt load will relegate the US to third-world-country status ("Hey, Bono, how ‘out some debt relief for the US? I need to buy a new Hummer"), I think it greatly increases the risk of a financial disaster if unforeseen events cause a crisis (see the effect leverage had on Long Term Capital Management). Credit is always readily available until it’s really needed. I just hope the US doesn’t find itself in a situation where it really needs credit but can’t get it because we’re all tapped out.