Maybe The Mayans Are Right

By: Don Shaughnessy

How would you behave if you knew with certainty that the world would end next week?

One of the people I went to university with is a big-time political operative. He once told me that even when the government is doing things that look stupid, they know more than we do and if we knew all, their actions would make sense.

I have come to believe he is right and our viewing point is too narrow to encompass all the conflicting interests in the country and the world. I am even more firmly convinced that the Americans know more than anyone else because they work at it more.

With the idea that the government always knows enough to make their positions and policies make sense, I have tried to analyze the fiscal position of the United States federal government. (It could as easily be California, Ontario or almost any other.) At first glance it is irrational.

But, I can explain it. I have decided that they know the Mayans are right and the world will end in December 2012.

Knowing that makes their policy make sense because there could be nothing dumber than to have the world end while you have an unused line of credit. Think about it. If you knew, with certainty, that the world would end next Tuesday, do you think that a few nice dinners might appear on the VISA card. I think so. Possibly a room in the presidential suite at the Four Seasons too. I might even miss a tax installment.

So it is with them. We think they are dumb and are trying to borrow themselves out of debt. Not so. They know they will never be required to pay the money back, so no need to be concerned about incurring more debt. Live for the moment.

I wonder how they know and I wonder if I should follow the same course they do.

If anyone knows how they know, please be in touch. I would even accept any other logical explanation for their fiscal policies. The downside if the Mayans are wrong is ugly; so, thus far, I am not brave enough to implement the plan.

Don Shaughnessy is a retired partner in an international accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.  don.s@protectorsgroup.com