Wednesday, January 24, 2007

Jim Jubak: State of the Nation? Broke

Via Jubak's Journal:

If you or I managed our money the way that U.S. government manages our money, we'd be headed for bankruptcy.

Imagine if someone you knew:

  • Took on a mountain of debt -- to buy a house, say -- at a floating interest rate and never bothered to ask if the future payments would be affordable. That's exactly what the U.S. government does.
  • Used his annual bonus to make the down payment on a Porsche Cayenne and never worried that his current spending had created a huge future obligation for years of high payouts. That's exactly what the U.S. government does.
    Ran up big credit card debt because the money he was saving for his kids' college education easily balanced out that debt. That's exactly what the U.S. government does.

  • Just kept on spending not only every bit of the monthly paycheck but every dollar that credit card companies and banks would lend, despite knowing that he would have to pay for college and retirement one day. That's exactly what the U.S. government does.

And then, of course, just like most deadbeats, what does the government do after mismanaging our money? It lies about how bad the problem is and clings to the hope that money will fall from the trees to bail it out...


Blogger said...

Thanks! There's just one flaw in Jubak's analogy: the source of the borrowed funds.

His hypothetical person uses his own bonus, credit cards, and retirement savings recklessly and without regard to future obligations. This is certainly foolish but in no way unethical or unconstitutional.

The government can only spend what it first takes from others. So a more apt analogy would be a person you know who embezzled or stole money from you and spent it on others you don't know or necessarily approve of. Then, when you asked about it, tells you its for your own good.

January 26, 2007 at 5:17 PM  

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