Dealing with the debt ceiling

Are you controlling?

Most of us would automatically answer "No!" because that word has so many negative connotations. But whether or not we are controlling, there are always places in our lives where we try to assert control. The trick is in knowing which places are appropriate to do so, which aren't, and how best to get control of yourself when things feel out of control.

This debt ceiling debate, judging from the number of client calls that I've gotten, is a great example of what you can control and what you can't.

In David Brooks' book "The Social Animal," he writes: "Raw intelligence is useful for helping you solve well-defined problems. Mental character helps you figure out what kind of problem you have in front of you and what sort of rules you should use to address it."

Regardless of how you feel about those governing in Washington, you will have to deal with the fallout of their action (or inaction). We are not dealing with a well-defined problem. The economic system is entwined with the political system, which is attached to social systems.

Contrary to what anyone says, we are not in crisis. We are in hot water and are very uncomfortable. But no matter what happens with the debt ceiling, we will eventually be fine. So how do you work on your mental character? By working on some things over which you have control:

•If your time horizon is short-term (three years or less), regardless of the environment, you simply cannot be invested. The time horizon is determined by your spending, not your portfolio. Take three years' worth of cash and put it into an FDIC-insured, online savings account.

•You need to look at the investments you own and decide whether they have a margin of safety within them -- are the stocks generating cash or paying a dividend? Are the bonds of high quality?

•If you cannot manage your emotions and need to exert some control, then raise a little more cash in the places where it will hurt you the least to do so. For example, sell some stocks within your retirement plan where there are no capital gains.

This debt ceiling argument has made us trust less. We are looking for motives behind the actions of those in Washington. Are they trying to posture for reelection? Are they blinded by ambition or faith? Are they wrongheaded, hardhearted, shortsighted? Or are they people like you and me?

Here is what you can control: Trust yourself. Trust that things are really messy and may get messier. And trust that you can handle whatever happens. Trust that things will eventually stabilize, whether it will be in 10 days or 10 years. But also trust that you are strong and resilient and able to overcome most hardships. And do little things to help others begin to trust again, too.

Embrace uncertainty. In a complex system, no one thing makes the difference. Higher taxes, lower spending, more social programs, more freedom from government are sound bites.

Everything is constantly changing. Philosopher Friedrich Nietzsche said, "He who has a why to live can bear almost any how." Do you know your why?

Take the time to appreciate everything that you have. We have far more to be grateful about than we have to fear. Spend your life wisely.