Basic
debt ceiling economics
By Dean Kalahar
If Congress does not raise the debt
ceiling, the result will be no different than the Jones family deciding that
they have maxed out their credit cards; and that if they continue borrowing and
spending over their means, there will be significant pain to the family at best
and bankruptcy at worst.
The economics of government is no
different
Mr. and Mrs. Jones want to be able to
provide for themselves in their retirement and hopefully leave a little
something after they are gone to provide a better life for their children and
grandchildren. They understand living in the moment and not planning for the
future is a plan for failure.
The economics of government is no different
The Joneses know if they stop borrowing they will not become
destitute, or default on their loan payments and obligations, because they will
continue to work and earn income. (Just
as the government will still take in tax revenue) They know that if they
reallocate and budget, which includes paying the interest and some of the principle
on their credit card debts, and live within their means - nothing disastrous will
happen!
The Joneses know they have a spending problem -not a revenue
problem, and their extravagance must end. They will have to define what is
essential for the family to provide stability. This will not be fun or easy,
but
they know their free spending choices have costs and they have decided
personal responsibility to their accounts now is better than painful
accountability later.
The economics of government is no
different.
Sure the kids will whine and their friends
will begrudge losing the benefits of cozying up to their big spending neighbors;
but the basic family obligations of securing the home, providing food for the
table, and making sure the children have clothes will ensure the health of the
family.
The economics of government is no
different.
If the Joneses want some things they
can’t afford, they can become more efficient, increase their productivity, sell
some of their assets, hold a garage sale, or just plain old save for that
special purchase on a rainy day.
The economics of government is no
different.
Over time the Joneses will adjust to
their new financial way of life, pay off their bills, and get back on solid
economic footing. At that time, they will have the option of having more credit
extended to them because their credit rating will not only be secured, it will
be enhanced.
The economics of government is no
different.
Character and integrity are important
to the Joneses, because living up to their commitments is not a slogan, it’s a
moral obligation. Over time the self-respect they have shown turns those who
were once resentful of their bounty and scornful of their austerity into
neighbors who view them with admiration and strength.
The
economics of government should be no different.
If Congress decides to stop borrowing money and not raise the debt ceiling - nothing disastrous will happen! And any attempt to prove otherwise is futile because it’s just not true.
