debt, again.

Friday night the most powerful nation on the earth was taken down a notch in its borrowing capabilities. The S&P decided to lower our credit rating among countries. Our rating has never been less than a AAA since they started rating us. (I think in 1917). We managed to go through two world wars and the “Great Depression” without a down grade. So what went wrong? Why now?

What’s obvious in every household across America (or if its not obvious yet, will be eventually) is that you just can’t spend more than you bring in for very long. Eventually you’re going to have to pay up. I’ve so far tried to remain non-partisan but this post may not make you happy. I’m not particularly involved in politics but I listen a lot and I read a lot and I do the money here at home so here goes.

Money, by itself isn’t bad. It’s very useful, actually. We use it to pay debts to those we owe, to pay for our mortgages, to buy our food and to pay for our gas so we can go and make more. We use it to buy a vacation or to go to the movies or go out to dinner. We use it to purchase clothes, and books, and tools and anything else you can think of. Money seems to be what makes the world go round. It used to be, maybe not in our time, but it used to be a bad thing to buy something you couldn’t pay for right then. Even houses were bought and paid for up front. Men and women and children worked and saved until they could buy something. And then when they bought it, it was theirs, free and clear. No mortgage, no credit card payment, no car loan.

The bank still owns my house, if I quit paying my mortgage, I lose my house. I really don’t know anyone who can go to the bank and say, “listen, I don’t like my job, I have no savings, I have no surety of any kind. Will you give me more credit so I can continue going to the movies and eating out? I really like having my big house and fancy car and big screen TV, I’m not selling any of that. I really don’t want to work harder I just want the free ride.” And have the bank say “sure, no prob.” That’s what our government has done.

Our representatives in congress have messed up big. They, the democrats and the republicans, have allowed our great nation to rack up even more debt. Much more than it makes. I know debt isn’t all bad but it should be limited. Before it’s determined that more money is “needed” it’s important to cut spending that’s not “needed”. I’m not talking about wants here, I’m talking about needs. North Carolina is an example of how to balance a budget so you can pay your bills. Yes I like having the library open late and even on Fridays (Harnett Co Library cut out Fridays a week or two ago). I like not having to pay for my kid to participate in the Science Olympiad. (that’s not covered anymore either) But “wants” have to be cut so that “needs” can be paid for. It’s not always easy. It’s not always fun. It is, however, important to not get your needs and wants mixed up.

thanks,
w

*note- My post “USA” had an error that I fixed and I want you to know. The constitution does not actually “give” us our rights like I had previously said. Our rights are given by God and God alone. Changing the constitution does not change the fact that we have rights. Our constitution is a great piece of work and it does a reasonable job of protecting us from an out of control government. I do believe, however, that right now our government is getting very close to being out of control. I highly recommend reading the Federalist Papers. They explain why things were written the way they were in our constitution. You can pick up a copy for a dollar at the Kindle store and it’s also available free online.

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