How many times have you heard the Republicans say that families sitting around the kitchen table have to balance their budgets, so should the U.S. government. What a crock of BS.
Helen Olen from the guardian in the UK, does a nice job of explaining Why the federal budget can't be managed like a household budget.
excerpts below the fold.
"Every family in America has to balance their budget," recently thundered Speaker of the House John Boehner.
I guess that's why an online poll last year found 69% of us never reconcile our checkbook and another 10% rarely bother.
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As long as you can afford the monthly tab, most financial experts would tell you a mortgage is a good thing to have. Why? Well, owning a home is a long-term investment, ultimately a good thing for your household bottom line.
I would also add, some auto loans are an investment in your job stability, a well thought out student loan can be the best money you will ever borrow in your lifetime.
Yet this nation of current and former mortgage holders doesn't believe it. Internal Republican party polling obtained by the online publication Politico revealed that a majority of voters believe balancing the federal budget would "significantly increase economic growth and create millions of American jobs."
Been to Great Britain lately? Greece? Italy? That austerity thing is working out just great for them. The more they cut, the worse the hole their economies face. That's why Britain is likely entering its third recession in less than five years.
Bill Maher calls this the Republican bubble.
The United States government, when it needs some cash, is in a much better situation. It can issue bonds to raise money – federal IOUs with very low interest rates. (The interest on the 10-year Treasury note is currently 1.91%, for instance). The government can raise taxes. As a last resort, it can even print money, as I pointed out last week in a discussion about the situation in Cyprus and why it can't happen here.
And about that printing money thing. The Fed has printed a lot of money in the last few years, which is exactly what they are supposed to do during an economic crises. And if those Republican dicks in congress were doing their jobs right, we would have a huge jobs/stimulus program thanks to the newly printed money the FED is begging it to use, and we would be in the middle of strong recovery instead of teetering between weak recovery and near recession.
So if the Republican Tea Baggers think that the U.S. budget should be more like family budgets, than the next time they propose a constitutional amendment requiring the government to only be allowed to spend what it takes in, let them expand that amendment to cover all the family budgets they claim to want to replicate. Only cash for houses and cars, no student loans, no credit card debts, ... a strictly cash economy! And as soon as all the Tea Baggers "balance" their budgets, than the U.S. government should have to balance its.