shanen's Journal: Credit card without a limit?

[From another site, in response to a prediction of the government hitting the debt ceiling in February.]

Actually, it's been going on for many years. They just keep raising the debt limit--and then they continue right on borrowing more money until they "use up" the new credit limit.

Think of it in different terms. Imagine that a credit card holder was allowed to raise his credit limit whenever he wanted to. That's actually quite close to the situation we have here.

Some people might be able to raise their limits responsibly, but it's kind of hard to imagine. If you're living within your means in the first place, why do you need to borrow money? If there is some kind of special problem, maybe you need a little extra money to tide you over, but what happens when you've been living on credit for as long as you can remember? What's the difference if you owe a bit more?

Well, the situation with the federal government is that they've always lived on trust. It says "In God We Trust" on the money, but God doesn't have much to do with it, if you ask me. It's always been a matter of whether or not the recipient of the paper believes it's worth anything. We're back to 'any power will be abused' again. In this case, the government has said that HAVE to trust the money, and if you refuse payment in their official money, then they won't help you collect the debt.

Now the situation has been turned on its head. The government has become like the customer with a red hot credit card that keeps raising the limit. The situation is already beyond the point that our customer even imagines the debt can be paid off--but someone keeps accepting the IOUs. Excuse me, but this can't go on forever. At some point it's going to be obvious that the customer is broke, and further IOUs will not be useful.

Of course the amusing punchline is that this is being done in the name of the 'responsible spending' Republican Party.