Credit Limit Increases for Congress

Imagine today the household of Sally Spender, a likeable girl from Middleton, U.S.A., who earns $2,000 a month but spends $2,500. At first, she lets herself believe her spending habits aren’t a problem, because she has a great credit score and is obviously reliable, otherwise her credit card companies wouldn’t have given her hefty credit limits with low interest rates.  Besides, she just bought a house, and she’s got expenses that she needs to cover. That couch she just bought home via a 12-month no payment promotion? It’s just a temporary expense, and once it’s paid off, she won’t need to worry about any other furniture or appliances.

After a few years, however, Sally starts consistently reaching her credit card limit month after month so she starts pulling money out of her long-term savings to pay off her interest.  Sally realizes that she doesn’t have enough money to pay for all of her expenses, but eventually, her savings account is empty.  Still, she knows her bills are too big to ignore.  So what does she do?

Common sense tells us that if we were in Sally’s position, we’d stop our spending – immediately. We would sit down, take a good look at our personal finances, and decide what permanent lifestyle changes we’d need to make to stop living beyond our means.  Maybe we’d exchange the expensive phone data plan with a basic one.  Perhaps we’d stop buying a new dress every two weeks, cook our own lunch and dinner instead of eating out, drop the subscription to NetFlix, or do all of the above to ensure we don’t increase our debt beyond our capabilities to pay it back.

Common sense tells us for our personal finances when we are spending too much based on our income.  Common sense tells us when to stop spending and from where we can make adjustments to keep us out of financial trouble.

Common sense tells us that we can’t spend our way out of credit card debt. 

Our government, however, is ignoring common sense.  Congress is spending money it doesn’t have, and it is dragging the country into uncontrollable debt to do so.  We know from our personal finances that we can’t spend our way out of debt, so why does Congress think the rules of common sense don’t apply to their larger, federal budget?

Congress is still trying to brush off this issue as an exaggerated concern brought about by those crazy, fear-mongering, right-wing, talk radio extremists, because they don’t want the public to look at the facts.

However, the fact is, as of December, 29^th, 2009, Public Law 111-123 was signed into law to “the continued financing of government operations” by increasing their spending limit to $12,294,000,000,000. Less than two months later (on Feb 12^th, 2010), Public Law 111-139 was signed into law to approve a public debt increase to $14,294,000,000,000.

Yes, that’s right.  In less than 60 days, Congress raised their “credit limit” and our bill -- not once, but twice -- to allow them to continue increasing spending and increasing our debt.  In less than 60 days, Congress essentially gave themselves a $2,000,000,000,000 credit limit increase.

To continue the Sally Spender analogy (where Sally Spender is playing the role of the irresponsible, indebted federal government), it’s like saying that in order to get the credit card companies give Sally Spender a credit increase, her solution isn’t to examine her spending habits and stop spending.  Her solution is to ask her employer for a raise, so she can simply spend more and dump more purchases onto her credit card debt.

Sound illogical? That’s because it is.

The skeptical employer, by the way, is playing the role of the U.S. public.  After all, the public employs government.  We hire them, we fire them, we pay them, and we finance every single one of their operations.

Congress is our nation’s Sally Spender.  Sally never considered looking at her personal finances to address her spending problem.  She just wandered off to her employer with her outstretched hand, since she figured, if her employer already dumps a paycheck into her bank account at least once a month, there’s no reason why they shouldn’t give her a little bit more, right?

Common sense tells us that the employer would (and should) tell Sally to go fly a kite. 

Common sense tells us that the country’s debt is out of control.  Common sense tells us that Obama's measly $100 million budget cuts (hilariously demonstrated here) won’t be but a single drop in a very, very large bucket.

The federal government thinks it knows how to spend your money better than you do.  Well, common sense tells me that this simply isn’t true.

Happy Tax Day.

~Gee