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NUGENT: Consulting the Oracle of Omaha

Warren Buffett might have some useful advice for Fedzilla

- - Tuesday, November 30, 2010

The Oracle of Omaha, Warren Buffett, recently wrote an Op-Ed column in the New York Times in which he thanked and praised Uncle Sam for stepping in and preventing the economy from going over a cliff.

While I'm not privy to, nor do I fully understand just how dangerous the situation was that forced Uncle Sam (meaning you, the taxpayer) to step in and borrow, bail out and spend trillions to prop up the economy, what I do believe is that the root cause of our economic collapse was the Fedzillacrats in Washington who continually turn a blind eye to the financial black holes known as Fannie Mae and Freddie Mac - both of which are managed by Fedzillacrats. Hey Peter, you might want to meet Paul.

Not only did Fedzilla turn a fatuous blind eye to the financial affairs of Fannie and Freddie, but it pressured banks to make home loans to people with no credit or poor credit or who couldn't possibly afford the home.

To that extent, for Mr. Buffett to thank Fedzilla for saving itself from its own bad policies and horrible mismanagement of Fannie and Freddie is analogous to a 1870s banker writing an Op-Ed column thanking the James Gang for not robbing his bank.

We shouldn't thank Fedzilla for keeping our economy from slipping into the abyss, but rather blame Fedzilla for putting us in this perilous position in the first place. Much more important than that, however, is demanding that the very dunderheaded policies, procedures and practices that pushed our economy to the brink of disaster are not continued or repeated. Insanity anyone?

They haven't been fundamentally changed. Fannie and Freddie remain financial sinkholes.

No doubt that the Oracle of Omaha is an investment guru, but instead of penning an Op-Ed thanking Fedzilla for saving itself from itself, it would have been much more enlightening if he had shared his thoughts on how Americans should and could dig ourselves out of our ever-deepening financial hole.

Economic reports indicate that the debt and deficit spending will increase trillions of dollars more for a number of years. Does the Oracle of Omaha think we tax, borrow and spend our way until happy days are here again?

Some economists think America is not far behind the financial train wreck known as Greece. I heard one economist say we have two years, and then all bets are off. Others, such as Sen. Judd Gregg, New Hampshire Republican, have made some harsh statements about our short-term economic future. What say you, Mr. Buffett?

Fedzilla is gobbling up a greater and greater percentage of our gross domestic product. One has to wonder if the tremendous growth of the federal government concerns Mr. Buffett.

For every three dollars Uncle Sam spends, one of those dollars is borrowed. Does Mr. Buffett think this is smart fiscal policy?

The highlights of the report from President Obama's debt commission were released recently. It would be fascinating to know what this other Parrot Head (the original being Jimmy Buffett) thinks about the commission's recommendations or what he would do to reduce our mounting debt or even if the Oracle of Omaha believes in debt and deficit spending.

Entitlement spending is the elephant in the room that no politician wants to address. One has to wonder what Mr. Buffett would do to reform Social Security and Medicare.

It's not just Fedzilla that is upside-down financially. California is broke, and Illinois is right behind California. Numerous cities, such as Chicago, New York and Los Angeles, have piled up dizzying amounts of debt. Even Mr. Buffett's fine city of Omaha has its financial problems, which have resulted in an effort to recall Omaha's mayor. Is it a fait accompli that massive property-tax increases and other tax hikes are right around the corner?

I'm not being flippant. I would truly like to hear how Mr. Buffett thinks we can solve our numerous financial woes - or even if we can solve them.

Mr. Buffett has forgotten more about the economy than I'll ever know. What I do know, however, from what I have read and basic economic common sense, is that our economic future is not rosy. Maybe I'm wrong.

Mr. Buffett meets periodically with Bono of the band U2 to discuss the various problems that plague Africa. Next time I come through Omaha, I'll buy Mr. Buffett a cup of coffee if he's willing to discuss America's economic problems with the Motor City Soul Man. I'll even show Mr. Buffet a couple of greasy Motown ukulele riffs for the other Parrot Head.

Ted Nugent is an American rock 'n' roll, sporting and political activist icon. He is the author of "Ted, White and Blue: The Nugent Manifesto" and "God, Guns & Rock 'N' Roll" (Regnery Publishing).