Will it ever be possible for the United States and her citizens to get out of the economic hole we have dug ourselves into?
Say I have a friend who is up to his eyeballs in debt and really hemorrhaging cash. He tells me that he’s found the answer to his financial woes. There’s a new company that will allow him to increase his credit limit so he can afford to maintain his lifestyle! I just might slap him.
Congress is currently voting to raise our debt limit, and we the people are telling Washington to quit bickering and just and raise it already. But aren’t they just finding a way to raise the nation’s credit limit so that we can continue to live the way we think we ought to?
On a monthly basis, the U.S. Treasury spends well over twice what it collects from tax revunue. By the time they write all those Social Security checks, pay the medicare and medicaid bills that come in, fund defense, and give out tax refund checks, there’s barely and cash to make it to the end of the month even though there are hundreds of billions more dollars of bills to pay every month.
They (we) borrow the rest of the money we need to run the government by selling treasury securities–paper that says “we’re the U.S. of A and we guarantee we’ll pay you back.” But when it’s time for us to pay those loans back, the only way we can meet the obligation is to borrow more money.
Soon enough, the creditors catch on and cut you off because of your crackhead tendencies.
We’re calling this current recession an economic crisis–I guess we’ve been in a recession for the last 3 years. But I think the real crisis hasn’t hit yet. The real cisis will be when we can’t borrow our way out any more, and we have no choice but to live precisely within our means. The real crisis will be when we owe China and Saudi Arabia a trillion dollars with interest and when we can’t pay, they gang up and invade us or set up military bases on our soil. Why wouldn’t they try it? They already know they have way more money than us.
There’s no easy way out. Living within our means would be less like Sex in the City and more like Book of Eli if we’re really honest. If we dare scale back social security, unemployment insurance, garbage pickup, defense spending, libraries, road repair, Pell Grants, and 20 other things, life would be a lot different.
We will have no choice but to make those kinds of drastic cuts soon.