The Fairy Dust of Borrowing


As President, Barack Obama is fond of stating the obvious as if it were a profound and insightful truth, particularly when Congress even hints at cutting up his national credit card.  Yes, a nation must pay for the debts it has accrued.  No one that I know of has ever said otherwise.  Even under a staggering debt of $17,000,000,000,000 (that’s seventeen TRILLION, for those keeping score).  I am confident that no one has ever said, “Hey, let’s declare bankruptcy and just walk away from it all!”

But the self-proclaimed pragmatist in the White House seems to be willing to ignore reality when it comes to just what debt really is.  He takes the position that if his limited credit card, called the debt ceiling is not raised, he will simply refuse to pay his real obligations and ruin his own credit standing.  He will refuse to provide food for his family, but not give up his Rolls Royce.  He will harm, and keep harming, those who are among those he has sworn to protect.

When you buy a house, or a car, or even dinner with your significant other and put it on your MasterCard© or Visa© you have incurred a debt.  You received something of value that someone else paid for, and now you must return that money that was spent for you for something that you received whether it is a house, a car or a dinner.  Simple concept, right?

There are even what might be termed “serial debts.”  Your electricity bill, the cable TV hookup, anything that you receive on a regular basis over time incurs a debt.  But these serial debts are the result of contracts.  The vendor promises to deliver “x” on a regular basis and you, the receiver of those goods or services agrees to pay for them within a specified period of time following their receipt.

But even when such a contract exists, it is legally referred to as a “severable” contract.  It can be ended at any point in time by either party.  If this wasn’t true, you would be in the position of paying the bill for electricity even after you sold your home and moved into another.

Politicians, especially our current president, take the view that any promise that they make, that has been codified as a law, creates a contract between the government and those who benefit from whatever the promise entails.  Think Social Security, Medicare, Medicaid, unemployment insurance, AFDC, welfare in its most general terms, and so on. The idea of amendment or repeal of laws that have been passed is viewed in the same way most people view unicorns or Sasquatch.

To make matters worse, these politicians do not view any of these promises as “severable” contracts.

Politicians of both parties are also loathe to raise the taxes needed to actually pay for fulfilling these promises.  They know that raising taxes is really going to cause their cushy jobs to be viewed by the voters at home as “severable”, and they’ll be out of work.

So, our politicians promise more and more and more, while simultaneously assuring the voters that the money trees that grow in Washington will provide the needed cash to keep those promises.  What money tree you ask?  Why the one known as borrowing. The fairy dust of government by deficit.

Like many young people who want their dreams fulfilled and who run up huge credit card balances without realizing that there are limits, politicians too, have dreams and desires. Their primary dream is being re-elected.  They authorize the government to borrow money to make their desires a reality. They make promises that the nation cannot financially fulfill, and borrow to keep those promises. And the promises they make are usually unending.  Welfare’s promise was intended to help those in need to get through a rough patch in their lives.  Now we find that we are supporting them for their entire lives, as well as one or two subsequent generations of people who have determined that their entire lives are a “rough patch.”  So the payments (and the borrowing to make those payments) goes on and on.   We find ourselves sinking inexorably into the quicksand of debt.

However, what Obama and his Progressive cronies fail to recognize is that a promise is NOT the same as an unavoidable obligation.  If you promise your children that you will fly the whole family to Disney World in Florida, but before you board the plane you lose your job and income, does anyone think that you should go into debt without any ability to retire that debt?  Or should you tell your kids that they’ll just have to wait.  You can’t afford to do it right now.  There is no money.

Most people would probably do what is “pragmatic” and tell the kids that they’re sorry, but it’s not going to happen.

Same thing goes if Dad promises his daughter a $10,000 dollar wedding and she comes home quivering with excitement because her wedding planner told her she could make her wedding truly memorable for only, ONLY, $45,000.  That’s OK, isn’t it, Dad?   You can just ask for a raise from your boss to cover it, can’t you?

How often have we seen this happen with government spending?  We are told that the Obamacare software will cost “only” about $200,000 and the final bill skyrockets to nearly three-quarters of a billion dollars. We’re told that Obamacare itself will “only” cost $950 billion, but after rethinking the whole thing, it begins to look like the real cost will be in the trillions.

But that’s OK, isn’t it, Dad?  You can always borrow the money, can’t you?

In both these situations a promise was made, yet it is financially impossible to keep.  But promises can be modified, postponed or even voided.  It happens all the time – in the real world.

Unless of course you work in government.  In that case promises are viewed as if they were already the sovereign debt of the nation.

Does the promise of the government to improve education mean that cost should be disregarded?

Does the promise of making sure that the poor are protected from the vicissitudes of life or the consequences of their own poor choices really mean that protection will always be there, regardless of how much it costs?

Does the promise of government to insure medical costs are covered in your old age really mean that the youth of our nation are held in bondage to pay for their parents and grandparents, or even total strangers?

Does it mean that we truly have an obligation to pay for these things, or do we merely hope that we can do these things?

Hopes are never promissory notes.  Hopes are not guaranteed and backed by the full faith and credit of the United States.  If you purchase a lottery ticket and “hope” that you win, is the government obligated to fulfill that hope and write you a check?  Of course not.  Yet even with trillions of borrowed dollars sinking the futures of the people that all this unending borrowing was supposed to help, succor and protect, our idiot politicians are still unwilling to face reality.

Cross posted from Canada Free Press

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About Jim Yardley

Retired after 30 years as a financial controller for a variety of manufacturing firms, a two-tour Vietnam veteran, and independent voter.
Gallery | This entry was posted in Barack Obama, Deficit, Democrats, Economy, Government Spending, House of Representatives, Limited Government, Observing Our Culture, Political Doubletalk, Politics, Republicans, Senate, Taxes and tagged , , , , , , , , , , . Bookmark the permalink.

3 Responses to The Fairy Dust of Borrowing

  1. Kathy says:

    This is the most excellent article I have read on the Obama regimes’s out of control spending. Thank you for the voice of reason and sanity.

  2. Good article, Jim. I still can’t quite get my mind around the progressive approach. How can they look at 17 trillion and just refuse to think it’s important. Borrowing and printing, of course, but what is so ingrained in the Conservative mind — low debt, balanced budgets, low taxes — is simply not in their lexicon. Obama sees to think if he can just shovel money into infrastructure, education and research, then all will be well. There’s a disconnect from reality there, and I’m not convinced that it’s just hope — they really don’t care.

  3. Jim Yardley says:

    Leftists all think that they can bend reality to some form that will please them. And people like Obama are, with all due respect to the person in the Oval Office, just plain nuts. They want the country to be destroyed, at least judging from their behaviors. Like most community organizers he wants to destroy something just to show how clever he is. If he can take down the richest, strongest, most innovative, most compassionate nation that has ever existed, he will be convinced that he’s the cleverest fellow ever born. In his own view, Jesus would be second rate.

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