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July 18, 2011
Maybe If the Kitchen Table Is on a Yacht... with Servants
This AP analysis — or whatever you would call such an essay — by Calvin Woodward and Martin Crutsinger is dumb to the point of being offensive. Woodward and Crutsinger try to put the debt ceiling debate in terms of family finances, and the lede that the Providence Journal gave to the story captures the error:
The choice in simple terms: Borrow more while fixing the budget, or refuse more debt, leave some bills unpaid and risk upheaval
Perhaps I'm not alone in thinking that the politicians' preferred option would actually be to borrow more without fixing the budget and then make the same threats and doomsday predictions when the problem comes around again. And what about the unmentioned option of living within one's means in the first place? President Obama offers a typically erroneous comparison:
"A family, if they get over-extended and their credit card is too high, they don't just stop paying their bills," he said. "What they do is, they say, how do we start cutting our monthly costs?"We don't stop sending our kids to college, we don't stop fixing the boiler or the roof that's leaking. We do things in a sensible, responsible way."
The idea that our bloated government is so trim and efficient that the next cut will have to be to the roof maintenance budget is ridiculous on its face. But frankly, if a household is to the point at which it has to borrow forty cents of every dollar it spends, then it really has to think about selling the house and (contrary to the essay's authors) selling some assets is really not an extreme step.
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"if a household is to the point at which it has to borrow forty cents of every dollar it spends, then it really has to think about selling the house"
And that is a part of the current problem as well. Many cannot sell their house without bringing cash to the closing. I just tried to sell mine and I couldn't get a price that would leave me above water. And I bought in 2001. Well before the peak. So if I wanted to cut costs and realistically sell my house, I'd have to pay someone to take it from me. I don't even have the "downsizing" option. As is the case for millions of Americans.
Posted by: Patrick at July 18, 2011 2:07 PM40 cents out of every dollar the Fed spends....
Think about that.
I know there are economic pundits out there that know a lot more than I do about economics and how to pull out of a recession. And I see where, at times it's necessary and prudent to borrow.
However, 40 cents out of every 100?? Even with the current economy and Gov't revenue where they are, isn't it time to take a look at WHERE WE'RE SPENDING ??
Isn't it time to start cutting back?
That's what a household would do ( actually if I were borrowing that much I'm probably HAVE to file for bankruptcy, but the Fed really can't do that).
40% of what we spend is borrowed... not good people, not good at ALL.
Posted by: stuckhereinri at July 18, 2011 2:46 PM"40% of what we spend is borrowed"
Which is why as a *worst case scenario* the 3:1 ratio of cuts to new taxes makes sense. To get that 40 cents back, cut 30 cents and raise taxes 10 cents. Or is my math off there?
But that's a worst case. Of course the preference is to cut by about 50 cents and increase the national unemployment numbers, but this time with former federal employees. Sorry DC, but if it were up to me, you'd have massive unemployment going on down there.
Posted by: Patrick at July 18, 2011 2:55 PM"A family, if they get over-extended and their credit card is too high, they don't just stop paying their bills," he said. "What they do is, they say, how do we start cutting our monthly costs?"
Or, if it were my house, (which it essentially is) we would work harder and make more money.
Posted by: michael at July 18, 2011 3:32 PMMust be nice, Michael, to be able to work unlimited overtime as a fireman and double your salary whenever you need some supplemental income. Please let me know a private company where I can do that. I'll quit my current job right now.
Posted by: Dan at July 18, 2011 7:33 PMI thought I was the ankle biter, Dan. Go build a deck or wait some tables if you need some extra cash, that is what I was talking about. My household budget is already at rock bottom, there are no cuts to be made. If i need to raise revenue, working harder is the only way I know. The key word being work, not take, as in taxes. More people working means more taxes collected without raising them. Or, get our budget down to the bare essentials, of which my present occupation is one of.
Posted by: michael at July 18, 2011 7:56 PMThe difference is that my statement isn't a personal attack on you. It's an attack on the ridiculous practices of the city of Providence that have brought it to the brink of bankruptcy.
Posted by: Dan at July 19, 2011 7:43 AM