BY RUSSELL TURNER
PLANNING FOR THE FUTURE?
Having been in business for the majority of my adult life, I have come to realize that to stay competitive it is necessary to have a plan to constantly upgrade your operation. Too many unsuccessful people never seem to learn this simple fact. When you sell a product it is tempting to get the money and spend it on something that we think will give us some kind of pleasure. Just imagine how our food production system would be if the farmers of the past refused to purchase modern tractors and equipment and simply kept their old mules and kept farming the same ole way. In a few short years most of the people in the country would be on starvation and the farmer would have a couple of old mules destined for the glue factory.
We Americans have become a nation of people who demand instant gratification with no regard to what the future might bring. That mentality has invaded our corporate as well as our government sectors. In the 1960s, the average stockholder held their stocks for eight years and four months. Now, in the world of digital trading, it's down to just two months; today we are more interested in short-term profits over long-term investment. At one time, 50 percent of corporate profits were reinvested in the business. Now, 95 percent of corporate profits are going into stock buy-backs or dividends. Good for shareholders, but not necessarily good for the country. As for the short-term profits over long-term investment, what you'll find is that, in the long run, companies that survive by window-dressing their earnings each quarter can't do that forever.
I recently read a report by the treasury that made the point that as of August 18th our nation's total outstanding debt was $19.445 trillion. It has taken 293 calendar days (since Oct 30, 2015) to add the latest $1 trillion of debt. For comparison, it took the U.S. 205 years (from 1776 to 1981) to accumulate our first $1 trillion of debt. Over the past several years our nation has been on a spending spree; many of our esteemed political class have used that money to provided programs for their constituents to ensure their re-election. They were also looking to the short term instead of the long term. Today, much of our necessary infrastructure is in need of repair. Our electrical grid is one example; one successful terrorist attack could turn much of our country’s electrical power off.
Once a company or government gets behind on its long term investment it becomes increasingly hard to ever catch up. I have heard some of the liberal politicians say that they are not worried by the high debt because of low interest rates. Interest rates are at record lows. There are now 500 MILLION people around the world; in fact, living under NEGATIVE interest rates, but that is no guarantee that those rates will stay that way forever. Not if, but when, those rates do rise the interest payment on the $19.445 trillion will totally bankrupt our nation. Instead of planning for the future we are NOT PLANNING FOR THE FUTURE.
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