Part of what got us into the current financial crisis is our ability to suspend common sense and think that if the experts say it makes sense – then it makes sense. It might be time for us to return to our own common sense, and to remember that, if something does not make sense, there might be a reason – no matter what the experts say. For instance, if you purchase a home with no money down and no credit check, with a mortgage that requires only that you pay interest, common sense might lead you to question whether this transaction made sense.
The longstanding failure to use our common sense, which got us into this mess, continued this past week.
First, of the three people nominated by President Obama for his Cabinet who have tax issues, the one who was confirmed, Timothy Geithner, is secretary of the Treasury, the department that oversees the Internal Revenue Service. The other two, former Sen. Tom Daschle (nominee for HHS) and management consultant Nancy Killefer (nominee for Chief Performance Officer) retracted their names this past week.
Many think that Geithner should resign or be fired. But I’m trying to look on the optimistic side, so let me just say that his appointment provides an opportunity. If the tax code is so confusing that even the future Treasury secretary could not comply, then the IRS code must be simplified. Possibly Daschle and Killefer can help Geithner do just that. It defies common sense to believe that if the person in control cannot follow the directions and file their taxes properly, that others can. Leadership begins at the top.
Second, the stimulus package under consideration in Congress is based on the theory that we can spend our way to prosperity. I have been trying to make this same pitch to my husband – but when I do he looks at me as if I have lost my mind, and my common sense. The fact is that the timing of the fiscal stimulus will be much slower than anticipated, and its multiplier impact is unknown.