Tuesday, December 8, 2009

Revised Chart of Federal Debt

These figures do not include the insertion of additional debt to support the socialized medicine currently on the table. Billions in debt for America was terrifying to those who comprehend such things. Measuring it in trillions means we have advanced by a factor of 1000. The continuing escalation of these numbers is putting the seal of victory on the efforts of those who would destroy our country in a bloodless coup.

For comparison we shall line up a modest household budget with figures to establish the relationship. We shall assume a rent/mortgage payment of $500 per month. Due to some reverses (braces for the kid, a new patio, a loan to your Irish brother-in-law, etc.,) your credit card balance demands an additional $700 a month to maintain the minimum. The continuing fiscal demands for services (phone, TV, ISP, garbage pick-up, electric bill, gas, water, etc.), add another $600. Your car payment then adds another $300 a month and doesn’t include the insurance and licensing for your and the wife’s car (paid for) of another $100. Food, incidentals, vacation stash, clothing, donations (10% tithing?) and taxes are not included since they are paid from the left over loot.

That indebtedness now amounts to $2200 a month but you got the raise and now make $65,000 a year plus benefits (sick pay, vacation time, health insurance, etc.). That’s almost $5400 a month so it’s no big deal. All of a sudden, things change and you are now responsible for paying 3.7 (the difference between the ’08 budget and ’09 figures) times as much to retire your debt than you did the year previous. That means the $2200 in debt has turned into $8140 a month just to stay even. Whoops, you only make $5400 a month.

All of a sudden, it is no longer fun to answer the phone or go to the mailbox. In both cases, it’s just another dun. Your biggest choice in life has now become a matter of who gets paid this month. You decide that your best move is to get an overall loan to reduce your payments and lower your interest rates. It is then that you call your Chinese brother-in-law and ask him for a loan.

This foregoing tale is entirely fictitious—or is it? This is exactly what is going on with our government. Your figures for your budget were made up but not that far off. The government’s figures are spot on as verified by the Congressional Budget Office and represent reality. You, as a citizen and totally irresponsible, would probably not trade your new Chevy for a Cadillac Esplanade, your 1600 sq. ft. home for a ten room mansion and escalate your credit card purchases to space shuttle heights. Even though you may have made a few bum decisions on the fiscal front, you are not a total idiot and would not do it.

This is a metaphor for the path your president, treasury secretary, and the congress has chosen for the financial future of the United States. Our coinage and currency are backed by the “full faith and credit” of the United States government. If you were a legitimate lender would you loan a dime to anyone with a credit history of this ilk? No financial officer in the world can fail to notice just how weak our ability to repay a loan would be. They do not have the money available by making sour loans to folks who have passed their ability for repayment. Unless there was an agenda on the side bar to further cripple our economy, any country would be foolish to help us.

To further the possibility of financial collapse, our wise solons have enabled regulatory schemes predicated on dream scenarios to further hamper our greatest asset, the entrepreneurial spirit of our businesses, from enlarging our tax base. Referring to them as “spending like drunken sailors” does a disservice to both drunks and sailors.

Understanding finance is a largely boring study but the fiscal failure of the greatest nation on the face of the earth is an exciting show which no enemy will want to miss. We are under attack from without and within. Only our noble citizenry have the capacity to alter our course. Our leaders won’t.

In His abiding love,

Cecil Moon

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