Sunday, October 13, 2013

I have to live within my budget, so should the USA.


 "Obama refuses to cut any spending. Why should the debt ceiling be raised when we can cut expenditures? Why should everyone on welfare get a free cell phone? Cut that 1st and we would have billions to spend on more necessary things. I have to live within my budget, so should the USA."

Comment on the Daily Mail tabloid website which I frequent to read the popular comments to get a grip on center-right Anglo-American opinion on everything from politics to Kim Kardashian.

Aside from the obvious stupidity of constantly comparing the largest economy on earth with a family budget, even if you take that comparison at face value it is total bullshit.

The successful middle-class American family doesn't live "within its means" today nor has it ever. Home mortgage is a type of debt, car loan is a type of debt. If everyone always lived "within their means" and never opened a line of credit the economy would grind to a halt.

America only left the Great Depression behind during the massive manufacturing boom that accompanied World War Two, all of it put on a massive credit card, a spending spree so manic and reckless that it would be unimaginable during peacetime. A spending spree that led to the total American economic dominion during the latter part of the twentieth century.

Spending money you don't have is at the core of any capitalist economy. Debt is a financial instrument. A form of technology. Like any other technology its has its risks and rewards.

The high-level of current debt needs to be addressed, but its not going to be solved with a combination of refusing to pay accumulated bills and homey, worn-out platitudes about the family budget.

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