I’ve decided I can no longer drive my 1999 Ford truck. The 2018 Ford F-450 Platinum is only about $78,000, so that’s the one I want. My wife also wants a new SUV because her current car has clocked more than 100,000 miles, so she is ordering the Porsche Cayenne Turbo ($158,200). It is time to start living the good life!
And while we are at it we’ve decided that we no longer enjoy living in our drafty 130 year old farmhouse. She found a house that she really likes that’s only $2.1 million in Columbia’s nicest neighborhood and owning it will really put us in the town’s inner circle socially.
And those vacations we take a couple of times each year? We’ve always shopped long hours to find nice vacations that were less expensive, but we deserve better so we will begin taking the most expensive vacations available. From now on its only private guided African safaris, three-week stays in Paris, Fiji, the Seychelles, Dubai! Private jets, of course!!
And my wife who has never really cared much for jewelry has found a love for diamonds. She really likes the larger ones. Several estate pieces have caught her eye and should only set us back about $1.5 million. Each.
I know you are wondering how we can afford such a lifestyle. We can’t. But we have very good credit and can pretty much borrow as much as we want.
Sure…there is no way we will get it all paid off before we die, but that’s why we have three children. I’m sure they will be able to make the payments after we’ve kicked the bucket because we will only burden each of them with about $2 million of our debt (thanks, kids!!).
And yes, I know that when we accumulate too much debt the banks will eventually stop loaning us money or, more likely, will start charging very high interest rates when we decide to buy that new Porsche, but once again that’s a problem for the Roebuck kids.
Why should we live within our means when our favorite Uncle (Sam) refuses to do so? It is the American way. Right?
Our benevolent Uncle Sam has run up a debt that is currently almost $20.5 trillion. That’s about $63,000 for every American and our kids will eventually get to make the monthly payments. Of course that’s only federal debt and when we add in state and local government debt the total is more than $24 trillion, so maybe we all owe a little more than $63k.
Well heck, we can just write off that debt. Can’t we? If my wife and I get too far in debt and suddenly learn that we can’t afford that $70,000 sofa I’ve had my eye on we can just declare bankruptcy. Surely Uncle Sam can do the same! Well…no. He can’t. But he can continue to print more money, borrow it from himself, and borrow from foreign debtors (until they decide he is a risk for non-payment).
Yes..I did say “borrow it from himself”. The largest portion of federal debt is to Social Security and other government agencies, and that ultimately endangers our retirement entitlement. About 30% of federal debt ($5.6 trillion) is what’s referred to as “intragovernmental holdings” (money government borrows from government agencies). And, by the way, most of the remaining portion of that 30% is money borrowed from other government retirement funds for the military or other future governmental retirees.
And what about the remaining $15+ trillion in debt? A little more than $6 trillion is held by foreign countries. The rest is held by banks, insurance companies, private pension funds, and a variety of other sources.
Unfortunately for my wife and me, we can only tap in to the resources from a few banks before they start catching on and don’t approve our loan request for that new yacht. Oh well. The Lake of the Ozarks isn’t big enough for that yacht anyway.
But thankfully for Uncle Sam the borrowing sources are not so picky. Not yet anyway. That’s a good thing since the Republican Party, the party of “fiscal responsibility”, has now put the country on track to accumulate $30 trillion in debt by 2030 because of its tax cuts and budget deficits. We will be borrowing like never before!!
Unfortunately that also means that by 2030 government debt will be in excess of 100% of our Gross Domestic Product and that indicates a pretty high probability the government will not be able to pay its debts. Creditors will then begin charging extremely high interest rates for our Uncle to continue his high-roller ways. But, as I said, our kids will figure it out.
Or they won’t because there will be no solution.
Oh well. I still have good credit so I’m off to order my truck.
But… it’s all the last President’s fault!
I’ve tried to make this argument and it always falls on deaf ears. The party of fiscal responsibility is perfectly happy overspending on the military that we supposedly need to show our strength, because apparently big muscles is a priority in a nation with a high obesity rate. That’s why we still have our 2nd Amendment fetish to compensate for our physical shortcomings.
The party of fiscal responsibility and hypocrisy also has no problem cutting back on social security benefits and raising the retirement age… because they will never be part of that system. Why should they care if their donors don’t?
Now, are Democrats blameless? Nope. But at least they aren’t claiming to be “fiscally responsible.”
If only there was a way to produce better leadership in Washington. Unfortunately, the game is just about thoroughly rigged now. Gerrymandering, campaign finance and the Citizens United decision, voter suppression, etc.
14 Republican Presidential candidates and rural America elected the guy that they think is just like them because he puts ketchup on a well done steak… and they forget that he lives in the gold-plated penthouse in New York City. And he’s filed bankruptcy on how many businesses? What’s one more? America, the Bankrupt.
Hope you get a nice truck though. Even if it’s only slightly newer than the old one.
I’ll drive the old red truck till it dies. I prefer spending money on experiences than vehicles! Thanks for the comment, Matt.
Informative and spot on! Great post! Our current trajectory with either party is not sustainable. Attempting to communicate that idea to folks mired in partisan mindsets is disheartening.
What has happened to “conservative Republicans” and “Blue Dog Democrats”? They seem to have all run underground! I don’t understand why when we are full-employment, there is a move to keep “stimulating the economy”, which will most likely lead to inflation, higher interest rates, etc. Can’t we be satisfied with moderate growth? Guess that is not enough for big business and investment brokers?