Kiting Checks

Dear Friends,

This weekend I talked to a very savvy and experienced banker who asked me, “Do you know who is responsible for kiting the most checks in history?”

Humm . . . I guessed, “Was it Bernie Madoff or some other perpetrator of a massive Ponzi scheme? Or maybe was it a large company like Enron that got in financial trouble doing shady deals?”

“No, not even close,” he responded. “I’ve had more than my share of people who have kited checks on my bank, but nothing is all history comes even close to what our Federal government is doing today! Take last month for instance. Washington spent about $100 billion more than it received in income. So, the government financed the deficit by selling $100 billion of debt in the form of Treasure notes. And who you think bought the lion’s share this debt?”

“Well, I know China and Japan have been big buyers,” I ventured.

“Wrong,” the banker responded. “Our government through the Fed bought between 80-85 percent of the debt!”

Think about this. Our government is spending around a trillion dollars more than it receives each year. It finances these deficits by issuing debt, and then turns around and buys most of the debt it just issued! This cannot continue forever. Just like the individual who kites checks or uses a new credit card to pay off other credit cards to fund his large monthly deficit, there will be a day of reckoning.

What should we do? Learn and apply what the Bible says about handling money so you can give generously, get out of debt and save consistently. Then, help a friend at church, or a family member, or a neighbor do the same. And don’t forget to pray that the Lord will give our elected officials His wisdom at this critical time in our countries history.

Warmly in Christ,
Howard Dayton

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