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Let's use my family to illustrate the truth about this often repeated Republican talking point and deduce the sense of it. That truth, and sense, is that Republicans are both completely wrong about this issue while, paradoxically, their slogan is completely right.

I grew up living "above the store" where my mother ran her business, back then called a "beauty shop". My father was a dead fry cook and my step-father worked on an assembly line. Mrs. Left's father strung wires on an aircraft assembly line, her mother was a clerk in a wholesale warehouse and her step-father was a TV repairman. Before our generation, no one in either of our families had ever graduated from college and only a few had completed high school.

Mrs. Left and I met in college 45 years ago. We married in 1970. We have raised two daughters to adulthood, afforded them undergraduate college educations at major universities and plan to retire next year. We are both professionals, in public service, employed in the federal government presently. From near the beginning of our life together, Mrs. Left and I have been in debt and paid out interest to a variety of creditors, for our own educations, our cars, our homes, our credit lines and our children's educations.

Follow me into the tall grass for more on why I think America should balance its budget just like my American family has, that is, not.

Debt, in its proper place, is not a bogeyman, either for national or family budgets. Our first credit card was from Sears and we got it because we wanted a TV and couldn't afford to pay cash. By then, we had already been paying bank loans on our cars for years. Thanks to the GI Bill we were able to finance our first home when we were still in our mid twenties.

Over the years since then, we have changed jobs, lived in different parts of the country and financed various homes, credit card balances and student loan debts, all while remaining employed in professional positions. Though miniscule by Wall Street standards, our incomes have fortunately outpaced the cost of servicing and amortizing these debts. We have enjoyed, as a family, a general prosperity from having incurred the debts. Inasmuch as Mrs. Left and I contemplate retiring next year, after we turn 65, we have been paying down the debts in preparation for that. The student loans are covered by life insurance and we are paying off one last credit card balance.  

But the United States Government doesn't need to prepare for retirement. Thus, the cost of financing the national debt can more easily be serviced without unduly burdening the national economy. Long term debt is a matter of much less importance to an immortal entity like the United States than such debt must be to mortals like you and me.

So, as I see it, America Should Balance Its Budget Just Like American Families Do, or at least like my American family has done, by incurring debt to support prosperity. The Republican slogan is absolutely right; the Republican policy is totally wrong.

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Comment Preferences

  •  Tip Jar (17+ / 0-)

    Aren't you glad that the clueless won't get a chance to run the country again, just yet? Yeah. Me too.

    by LeftOfYou on Fri Apr 05, 2013 at 08:43:30 PM PDT

  •  Debit For A Family Or A Nation Isn't The Same (9+ / 0-)

    if your family would have liked to buy that salon they would have needed a loan. Debit. If they wanted to up grade the equipment. The same thing.

    You note this.

    I am sure many folks didn't want to pay my great, great grandfather the money he wanted in the 40, and 50ss to build bridges. But even to this day I often drive over them. Standing 50+ years after they were built.

    You got to pay somebody to get shit done.

    When opportunity calls pick up the phone and give it directions to your house.

    by webranding on Fri Apr 05, 2013 at 09:04:30 PM PDT

  •  Should government be run like a family... (7+ / 0-)

    or a business?

    I'm confused because Republicans tell me both.

    You've skillfully shown the fallacy in their "family" debt bumper sticker.

    Let me toss out one to chew on regarding their "run like a business" mantra regarding debt.

    Corporate bonds are debts issued by industrial, financial and service companies to finance capital investment and operating cash flow. In terms of total face value of bonds outstanding, the corporate bond market is bigger than each of the markets for municipal bonds, U.S. treasury securities, and government agencies securities.
    Hmmm...seems businesses are not so debt adverse either.

    You're right, Mr. Left. They are totally wrong.

    •  The Republican party has become home to (7+ / 0-)

      instinct-driven people, people who react to prompts and have trouble thinking ahead. These characteristics make them good followers and, since their primary mode of behavior is repetition, predictable. However, on a personal level, their intellectual deficits render them practically incompetent. They may have the will, but when it comes to actually producing anything of value, there is no way for them to deliver--i.e. meet expectations and pay what is owed. So, the very idea of obligations scares them and they deny they even exist. They own, but do not owe. They have, but do not give. You could say they live on a one-way street. Reciprocity is not something they perceive. Indeed, it's likely that they don't perceive the environment, either, because, being self-centered, they don't see what's around them.

      It's possible that situational awareness can be taught. But I suspect that when people reach adulthood without it, it's too late.

      Then too, it's pretty clear that the financial community goes to great lengths to keep people confused. For example, the Federal Reserve refers to the money individuals owe as "Consumer Credit Outstanding"

      http://www.federalreserve.gov/...

      Note that Americans currently owe $2.7 trillion. That's a national debt, but from the perspective of the organizations to whom it is owed, it is a credit. It all depends on who's point of view is being presented.

      Also note that half a trillion of that is now owed to the Federal Treasury, mostly as a result of the acquisition of student loans -- i.e. the federal government has been buying them back from banks. That's why that debt has increased from a hundred billion in 2008 to over five hundred billion in 2012. That's five hundred billion on which banks are no longer collecting interest. Of course, if loans are to be forgiven to graduates who go into teaching, for example, that had to be done since banks aren't into forgiving loans.

      We organize governments to deliver services and prevent abuse.

      by hannah on Sat Apr 06, 2013 at 03:34:19 AM PDT

      [ Parent ]

  •  by the same logic, the U.S. should be communistic (3+ / 0-)
    Recommended by:
    sfbob, Andrew F Cockburn, LeftOfYou

    After all, the economic model for a family is communism: from each according their ability, to each according to their need.

    So if governments should use the economic model of the family, we should get rid of corporations and move to pure communism.

    Unless of course, there's something wrong with the analogy between a family and the government...

  •  dunno about the rest of you (3+ / 0-)

    but i print my own money and sell my own bonds.

    The cold passion for truth hunts in no pack. -Robinson Jeffers

    by Laurence Lewis on Fri Apr 05, 2013 at 09:59:20 PM PDT

  •  clearly and logically stated (7+ / 0-)

    Nothing for conservatives to see here. You used no magical thinking or fancy gimmicks. You did not portend doom or blame the poor. You did not praise the job creators. You suggested that people working together get things done. You suggested that you built that-with help. This is incomprehensible to conservatives.

  •  Interesting story. (0+ / 0-)

    You and your wife work for the government, most likely were able to purchase your first home due to the federal government's VA  loan guarantee for veterans.  Your mention of the GI bill implies your education was federally financed and you must have gone to a publicly funded university if you were able to pay a mortgage from GI Bill payments.

    Correct me if I am wrong but I assume you also expect to retire on government pensions as well?

    Sounds to me like the 'prosperity' you are referring to has been mainly funded on the US Government's dime and that means the taxpayer's dime.

    If even half of this is true, how can you support any Republican meme regarding debt?

    •  Comprehension Fail (3+ / 0-)
      Recommended by:
      LeftOfYou, Expat Okie, Tommye

      Whether or not the diarist and his wife work in public service or as a chef and a paralegal is irrelevant.  They have maintained jobs and income providing a service for which they are paid.  The government provides services for which we, the taxpayers, pay. Why in heaven's name would you pick THAT point, of the whole diary, to whine about?

      Did the diarist and his wife provide services, and continue to provide services, for which they were fairly compensated?  So those paychecks made for a decent  living -- isn't that what most of us would want and strive for?  Why is it a crime to have done it by going into PUBLIC SERVICE?  They did what anyone else in their positions would surely have done, and for the same reasons:  to do a job they are good at.  To be able to pay for the regular outlays of daily living with cash on hand and, with debt paid back over time, afford a car, a house, to send one's kids to college, to be assured of preventative health care and other health services as needed.  To be able to afford a vacation, maybe, now and then.

      So what if the paycheck says "United States Department of..." or "Metropolitan District of...?"  It's still a paycheck.  It's still payment for services rendered that will be turned around to grease the wheels of private and public spending and help fuel the economy.  

      As for "support[ing] any Republican meme regarding debt," did you actually READ the diary?  The "meme" we are discussing is the hoary chestnut that the government's budget is like a family's budget, and debt is something we must get out of even if it kills us.

      Personally, I've never lived in or run a family that bent all its efforts on the elimination of every scrap of debt.  I'm rather younger than the diarist, but to my memory, there's ALWAYS some debt out there.  A credit card you use for gas purchases.  A mortgage.  A car payment.  Hell, the day after I pay off every single bill I ever had I would still have debt accumulating -- the utility charges, the property taxes, the car insurance that comes due every six months, the sudden or planned house or car expense that I simply won't have the hundreds or thousands of dollars on hand to pay for in cash.  

      Debt and payment, services needed and services rendered are the base cycles of an economy.  And what the diarist is very clearly saying is, "Debt, in its proper place, is not a bogeyman, either for national or family budgets."

      Anything wrong with that statement?  

      Then he notes that due to retirement, and a planned reduction in income, they are paying down their debt in preparation.  And then he knocks the chestnut into the fires of logic:  the government never retires!

      The government, unlike most of us working for a wage, never faces the end of its working existence.  It can string out debt for eternity, because it HAS eternity to pay for it.  There is no Zombie Apocalypse.  The date of the Last Judgement has yet to be revealed.  The United States has all the time it needs to accrue debt, service debt, pay debt, renegotiate debt... there is no light at the end of the tunnel because there is no tunnel.  

      We don't have a debt crisis. We have a cash flow crisis  -- one that could be fixed with a one page bill and a show of hands if the political will existed in Congress to do so.

      But even that doesn't invalidate the diarist's point.  If you run the government like a business or a family that will never see an end of income, then yep, it's a perfectly valid thing to consider.  You incur debt to support prosperity, over and over and over again.  Forever.  Because that's how long the government has.

      History should teach humility and prudence, but America doesn't seem to learn. I've never seen a virgin who loses her innocence so often. -- Gordon Wood

      by stormicats on Sat Apr 06, 2013 at 06:53:35 AM PDT

      [ Parent ]

      •  It does matter. I myself am post military (0+ / 0-)

        I prospered due to government guarantees on my first home and my college education.

        Incurring debt is one thing, incurring debt backed by the government is another.

        There is a difference and it needs to be voiced.

  •  Congress is tasked with issuing the currency. (1+ / 0-)
    Recommended by:
    stormicats

    The states and every individual person is in a different situation. They don't issue their own currency. The U.S. Congress has a monopoly, ever since the fall of the Confederacy. The Congress is tasked with managing the currency in Article I, Section 8 -- along with setting standards for weights and measures. It's an appropriate placement for the currency because, in fact, currency is a measure of obligations. Every dollar is nothing but a certified IOU, not unlike an inch is a certified measure of distance and an ounce is a certified measure of weight.
    So, why does the Congress ration the availability of currency?

    I suppose it's because it makes them feel powerful to manipulate exchange and trade by withholding a tool and then passing it out as a boon.

    We organize governments to deliver services and prevent abuse.

    by hannah on Sat Apr 06, 2013 at 03:06:02 AM PDT

  •  The smartest thing I ever did was to go into (1+ / 0-)
    Recommended by:
    Orinoco

    debt when I was in college. In the early 70s interest rates were relatively low and interest was not charged while I was in grad school. By the time that I finished my doctorate inflation had sky-rocketed and the value of the principal in the loans had almost vanished. I paid them off with my first postdoc paycheck because it was more trouble than it was worth to keep up with the paperwork.

    My lessons:

    1) Borrowing to purchase a useful asset (college degree in my case) is great if that asset will generate income to pay off the loan.

    2) Long term borrowing at a time of low interest rates is also a great idea. Bet with reversion to the mean, not against it.

    3) If someone is silly enough to give you a loan with a negative real interest rate, take it. US t-bills are paying negative real interest rates now.

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