Running Out of Money, Running Out of TimePrint This Story
Imagine your son graduates from college, gets married, buys a house and sets up housekeeping. He has a decent income, actually a pretty good income. They spend a lot on things you consider to be luxuries, even to the point of wasting money. You are concerned about their deepening debt, but they don’t seem worried. Your son borrowed money you were going to use for your retirement to buy the house. You didn’t feel good about putting your retirement savings on the line, but your son promised that he would begin paying back the money as soon they returned from their honeymoon in Hawaii.
The date for the first payment arrives. Your son walks through the door. Instead of handing you a check, he gives you an embarrassed look. He confesses that he and his wife have been living a $50,000 dollar lifestyle on his $30,000 income.
You ask him how he has been financing the $20,000 difference. He admits that he had been paying the minimum due on his credit cards, had hit the limit, and the banks had demanded full payment at once. So he got a cash advance from another credit card to pay them all off. You ask your son, “What crazy bank would give you $20,000, with all that you owe?”
With an sheepish smile, he says, “I used your credit card, Dad. I hope you don’t mind.”
Your stomach turns into an icy ball as you realize that you had lent your fool of a son your entire retirement fund so he could buy his house. When you ask him about it, he grins and says, “Oh, Dad, you know I’m good for it. Here, I made out an IOU for you.”
Fortunately, I started this off by saying “Imagine your son…” Unfortunately, the Government of the United States of America has actually done all that to us, and worse.
The federal government has had a good income for a long time. However, our leaders didn’t use our tax money (“revenue”, they call it) as a limit when they decided on their spending priorities. In nearly every year for the last half century, they spent more than they took in.
For most of this time, it was more of an irritant than a danger. However, over the last four years the spending has skyrocketed, and our government got the money to spend the old-fashioned way – they borrowed it.
The government has a limit on how much they can owe, called the debt ceiling. By law, Congress has to vote to raise it before the President can borrow any more than that amount. In the past, Congress has always granted a request from the President to raise the debt ceiling, although often there was some political horse-trading or posturing in exchange.
Not getting enough “revenue” from the taxpayers, the government sopped up every spare dime it could. The bedrock benefit of being an American citizen, Social Security, has been raided. The “Social Security Lockbox” some politicians talk about is filled with IOUs.
Now, our nation is borrowing 40 cents out of every dollar it spends (I’m not joking). You don’t have to be a fiscal genius to see that there’s going to be a painful reckoning someday, maybe someday soon.
The President claims that the government will run out of money on August 2nd. He also says that the government will default on its obligations, which will mean no Social Security checks, interest rates will skyrocket, and the stock and bond markets will melt down, along with the rest of the economy. Nonsense, the Republican Congress says; the government still has over $200 billion dollars of tax money coming in every month. Interest payments on the debt, Social Security, Medicare, Medicaid, the military and some other things can be paid first, and other spending can be cut until an agreement can be worked out. The President says he will only sign a debt ceiling bill that has significant tax increases; Congress says they will not pass a bill with tax increases.
The small-government Tea Party members of Congress and the Republicans want to make the tough cuts in spending now, and pass an amendment to the Constitution that requires it balance its budget. Forty nine states have this in their state constitution in some form. House and Senate Democrats and President Obama are opposed to this. Why?
I don’t know why living within ours means should be a political argument. I can see having disagreements on what and how much to spend, but I can’t see how any sane person thinks its ok to borrow forty cents of every dollar you spend, with no end in sight.
According to USDebtClock.org, which keeps track of these numbers, the national debt per citizen is $46,642.00, and the debt per taxpayer is $130,069.00. This isn’t funny money; it is real dollars and is a drag on the economy, and a burden to all of us.
The problem is, I don’t think many in Washington think of it as real. If our leaders understood the menace of this debt hanging over us, how could they spend money the way they do?
Which brings me to the picture at the head of this article. The “shrimp on a treadmill” story has gone viral over the internet. You can find it on the web, but in a nutshell a $500,000.00 grant was given to study the effects of running on a treadmill on shrimp, with no clear purpose. It is a shining example of the waste of our personal and national treasure. In the middle of the current crisis and deadlocked budget negotiations, with the threat of not sending out Social Security checks, while the credit rating of our nation hangs in the balance, this kind of insane waste continues.
Forty cents borrowed of every dollar spent. $46,642.00 debt on every citizen. $129,069.00 debt on every taxpayer. $500,000.00 for the ultimate shrimp cocktail. The numbers are clear. And frightening.
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