Sunday, July 10, 2011
Warren Buffett: How to Solve The Deficit Problem in 5 Minutes
While I admire Buffett's capital allocation skills as CEO of Berkshire Hathaway, I always find it puzzling that he never seems to apply any standards on government spending, where waste, fraud and abuse are well-documented staples. I doubt he or his shareholders would tolerate inefficient capital allocation of this magnitude within his own company. It's also well-known that he feels the wealthy don't pay enough in Federal taxes (see The Grouch's Billionaire Challenge), yet he fails to take advantage of the opportunity to donate to the Treasury to make up for the difference between what he thinks he should be paying in taxes and what he actually pays. In addition, if giving the government more money is morally right and a wise allocation of capital, why did he not donate his fortune to the government instead of the Bill and Melinda Gates Foundation? Is anyone else troubled by these seeming contradictions? In the video above, Buffett does hit upon one of life's eternal truths-- if there is no disincentive for bad behavior then you can expect a lot of bad behavior. As a wise man once said, "Capitalism without bankruptcy is like Christianity without hell." That saying succinctly sums up the economic recession of 2008-10, too big to fail and the ever escalating crisis in deficit spending.
Posted by The Grouch at 1:05 PM
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