Some days I sit back and marvel at the way our government's financial
situation is presented to us by the media and the politicians. It
seems to me that when applied to our Government, all rules of sensible
financial management are abandoned. In their place is substituted
a system of "Funny Finances."
An argument could be made that, because we are not politicians
or media types, we simply cannot understand the financial principles
that our Government uses.
I think the only thing we do not understand is why the same principles
continue to be used when they obviously do not work.
Have you ever thought about trying to apply the financial principles
our Government uses to your family's finances? Let see how it works.
Bill says to his wife, "Jean, it is near the end of the month,
and it looks like we are going to run out of money again. But this
month it is even worse - we are not going to able to borrow to pay
our bills like we usually do!"
"Are you sure, Bill?" Jean asked. "How about a fourth mortgage
on the house, or getting the credit cards to increase our credit
"No, I already tried that. None of them will play ball with us!
I just don't know why they don't understand that we need to be able
to borrow to pay our debts. I guess they just don't care that our
credit score will drop if we default on our bills. This is really
a problem for us this month!"
So, Bill and Jean sit at their kitchen table most of the evening
trying to think of some way to solve their problem. They call every
one they know to try to borrow money, their immediate family members,
three cousins, four friends, two neighbors, and even a couple of
churches. All to no avail!
This couple is going to spend a sleepless night - what will
One does not need to be a financial genius to see that Bill and
Jean are focusing on the wrong problem. They are focusing on their
borrowing problem, when they should be focusing on their
If they would spend less than they make, there would not be a
need to constantly borrow. The borrowing problem would
disappear if they would solve their spending problem.
But this is not one of the principles contained in the "funny
finances" system. Therefore, Bill and Jean's financial problems
will never be solved - even if they find a way to borrow more.
This "funny finances" set of principles will not work when applied
to a family setting. In fact, they will not work when applied to
any setting, especially a Government setting.
All the media can talk about are the disastrous results that
will occur if our Government does not find some way to borrow more.
Their focus is entirely on raising the "debt ceiling," which will
never solve our country's problem.
The real culprit is a spending problem, not a borrowing
problem, so why don't we hear anything about establishing a "Spending
Ceiling?" After all, if our Government were to spend less
than it made, the "Debt Ceiling" problem would take care of itself.
Isn't that what our families would do to fix the same type of
problem - cut our spending until it was less than our income?
I can hear so many people responding, "But Jim, You don't understand
how the Government works. It is just not that simple!"
My response? "It could be."
©Jim Garnett. The information
on this site should be understood to be a general discussion of
the subject matter and DOES NOT constitute a legal opinion about
the situation. For further information please consult a qualified
© Jim Garnett, The Debt Doctor
AskMrG Consulting, LLC
2216 SW 35th Street
Ankeny, IA 50023