Why I Can’t Understand Our Fiscal Crisis?
As I was trolling radio last week I came across an interesting exchange between a liberal and a conservative commentator concerning our nation’s current fiscal crisis. The liberal attempted to make an analogy to explain what it would be like for us to not extend and raise the debt limit. I’ll get back to that in a moment.
The debt limit is the amount the United States government can ‘legally’ borrow . The President has recently suggested that he be given the authority to extend the debt limit without the approval of Congress. Whenever the debt limit is ‘extended’ it is really raised so that more money may be borrowed to continue to fund the government at so-called current levels. One might rightly ask why this money is needed. Simply because the government spends more money than it takes in, and this money-eating machine refuses to stop doing so. To make up the difference, the government must borrow money from banks with the promise to pay it back based on the “full faith and credit of the United States.” The alternative is to just print more money, but that is a fast road to financial anarchy via inflation. It may yet come to that if banks, such as the Bank of China, finally refuse to lend us more money. It has been suggested that if the debt limit is not extended, the United States would be unable to “pay it’s bills.”
The fact is our federal government spends far more money than it can ever take in. It spends more than a trillion dollars over revenues received each year. To try and comphrehend this, let’s say you had $1 trillion dollars. Time to party, right! Well, you could party to the tune of $1 million dollars a day and it would take you 2,740 YEARS to spend it! Our official debt is $16.1 trillion! However, our real debt is a mind-boggling $88 trillion dollars! That’s the figure if “unfunded liabilities” are included. Those are payments of Social Security, Medicare and Medicaid that our government has promised to current and future retirees and others. Unless we are going to say to those people, “Sorry we can’t keep our legal promise to you,” there is no way to avoid adding these to the debt. This debt translates to a $1.1 trillion deficit just for a year if we DON’T include unfunded liabilites! Remember this is not what the government spends. It is the amount over and above what they spend every year! The official $16.1 trillion in debt is the accumulation of that deficit over the years. It is so large our government cannot service even the interest on that debt and incredibly they want to spend even more with no real ‘cuts’ proposed by either party!
With that explanation let’s return to the analogy this liberal commentator attempted to make. She stated that not extending the debt limit would be akin to you or I going out to dinner at a restaurant and discovering we could not pay the tab because the credit card was over it’s limit. I was stunned by this! “Was she seriously trying to compare me paying my bills with the fiscal policies of the federal government?” I asked myself out loud.
A better analogy would be this. It is like me writing a check for $1 million that I know will bounce and then calling my bank and demanding that they honor the check so I can continue to pay my bills despite the fact that I have yet to even keep up the interest payments on what I already owe! I can hear the VP of Loans at my bank laughing now.
This is why I do not understand our fiscal crisis. If it was me, the solution would be stop the spending, period. Reduce my expenses and learn to live within my means, period. In reality, I would have no choice. It is basic mathematics that if I continue to spend more than I have or can bring in, I am going to go broke. My personal ‘economy’ will collapse and my freedom will soon be forfeited. Folks, it is mathematically impossible to pay our debt by taking in more revenue! If the government took ALL OF EVERYONE’S pay, it would not be enough to begin to pay this insane amount of money. Just do the math. Mathematics doesn’t change just because the amounts of money are greater. Mathematics doesn’t change just because there is a different name on the check or credit card. We are sorely mistaken if we believe the United States is so large the laws of mathematics don’t apply. If we do not take drastic measures such as eliminating entire cabinet departments (more than one would be required) to reduce spending, the price we pay will be the loss of our freedom, period! Our liberty is what is really at risk and I don’t understand why our government doesn’t understand this.