If simplistic nostrums can save our government, why not the American family too?
From the new christian scientists now ascendant in the politics of America (well, they have been ascendant most of the time since 1980, but are currently enjoying a new iteration as tea partiers) comes a new theory of government. Just as the Bible is literally true in every respect, and humans co-existed with dinosaurs, and there are no such things as evolution, or human-caused climate change, or an end to oil, now comes another self-evident principle to guide our nation. (Self-evident because outside the statement itself, there is no existing evidence or even indication of its truth.)
Here it is. Government should be run like Americans run their households. American households don’t spend more than they make, don’t go into debt, and cut spending when times are tough. And so should our government. We have heard this exemplar family, gathered around the kitchen table (what’s a kitchen table? Is that like a breakfast bar?) described over and over again in speeches, but we have yet to meet it in the flesh, or even see it on the Today show. Nevertheless, by its example, we are being told, our government must stop spending money for food, medical care and the education of children, and focus on paying the bills for our armed guards.
If this is true — and of course it isn’t, but just hold your breath for a minute — then the inverted obverse of the proposition must also be true, as I’m sure you remember from your studies in Creative Logic 101 (now required for a degree in political science). If it is a good thing to pass legislation requiring the government to behave like a mythical family, then therefore it should be just as beneficial to require families to behave like the mythical government. I propose legislation to require it.
First, forget borrowing. Forget a new car, as a matter of fact forget the car you have, you have to sell it and pay off the loan, not that you’re going to get enough from the sale to pay off the loan, but this will make you a better financial person. House? Are you kidding? Having a house means your debt will exceed 100% of your Grossest Domesticated Product, and that must never happen. Because we said it must never happen, that’s why. So sell your house and pay off the loan, not that you’ll get enough from the sale to pay off the loan, but once you have no place to live and no car with which to get to work, or back to Mom’s house, you’ll be a better example to others.
Student loans? No, no no! Until your kids can get good jobs that allow them to pay as they go, no college for them. Obviously, you are in no position to help them now, and that’s a good thing. For their character.
Will corporations still be allowed to borrow money to make payroll, or buy back stock, or pay CEO bonuses? Of course. None of this applies to corporations. Who would waste their time trying to improve the character of a corporation?
And now that you have no income and no prospects, you must, as a responsible American family, cut your spending to zero. No, you may not use credit cards to get through the bad patch, because all borrowing is bad. Just do with your food, medicine and clothing what you have already accomplished with your shelter and transportation. Give them up.
Then, and only then, will you be able to stand tall above your fellow citizens as the embodiment of fiscal responsibility. Just briefly, until you faint from hunger.
This is great, except that you totally blow the analogy.
It’s okay for people to borrow, as long as they have a realistic expectation of being able to pay back AND as long as the percentage of their salary devoted to paying on their credit is below a specified limit AND as long as they have an emergency fund totaling several months’ salary in the bank.
That means the government can borrow maybe 30% of its spending MAX as long as there is a realistic expectation of being able to pay it back AND as long as the percentage of tax revenues needed to pay down both interest and principal is below a set limit AND as long as their is several months’ worth of tax revenues in the bank as a rainy day fund. None of those situations apply to our current situation vis-a-vis the federal government and deficit spending.
It would have been okay to spend an extra trillion or two if we had a trillion in the bank AND planned to reduce spending after a couple of years back to the baseline… but the Democrats have absolutely no intention of returning spending to 2008 levels.
It would have been okay to borrow a couple trillion for stimulus spending if we had a reasonable ability to pay it back, but we were already $9 trillion in debt, and today we borrow 42 cents out of every dollar we spend.
And, of course, we have absolutely nothing in the rainy day fund except a bunch of IOUs that aren’t worth the paper they’re written on.
The first rule of holes is, if you find yourself at the bottom of one it’s time to stop digging. We are in a HUGE financial hole, and we’ve been digging for decades. It’s time to stop. We can’t afford the social safety net we’ve established, and trying to pretend we can is only going to bankrupt everyone. Equalizing wealth by redistribution doesn’t make some people better off, it only makes us all poor.
The US will have around a $15 trillion GDP in 2011. We’ll also have a $15 trillion national debt. We are insolvent by definition. And even if the government confiscated every single dollar made by every single individual and corporation in America this year we’d not quite pay off our debt… and just about everyone would be broke (because we’d have to liquidate our assets to pay our living expenses).
Do you not understand why we have to stop spending more than we collect in tax revenues now? Yes, many people will be hurt by this. If we don’t, however, we will ruin everyone in the country and probably take the world down with us.
I agree with most of what you said, down to the “do you not understand” part. With millions upon millions of Americans unemployed, foreclosed-upon, facing poverty, hunger and death, now is not the time to make thrift the number one national priority. Now might be the time to end a couple of trillion-dollar wars. Your second paragraph actually restates the point of the piece: very few American families can, or would be willing to, meet your standards for borrowing. Let alone the standards you propose for the government.