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Thursday, January 6, 2011

The Debt Ceiling

Someone help me understand this thing about the "Debt Ceiling". I hear the pundits say that we have to increase it or the United States will go into default and it will be a catastrophe. REALLY? WHY?

Now as an individual, if I had ever increasing debt I would suppose it was because of my spending, right? Now one possible "solution" would be to raise my credit limit on my credit card, and borrow more money to pay off my debts. The problem with this is that the debt will continue to increase in a vicious circle which will require that I go back to the credit card company for higher limits again and again and again. Another "solution" would be to increase revenue. Unfortunately, if my only source of revenue is the armed robbery of individuals, then there are probably going to be limits on the revenue I will be able to raise, RIGHT?

My last "solution" is when the bills come due, CUT SPENDING and use the savings to pay the bills. Glory! Hallelujah! As a blind hog will eventually do, I have stumbled upon the logical solution! Yes, I will have to give up some of the things I am used to having. Yes, it may be unpleasant and pretty tough for a while to get used to a less extravagant lifestyle, but slowly.....the debt will begin to recede.

Now, when the bills come due for Uncle Sam, why not cut spending in an amount necessary to pay the bills and NOT raise the debt ceiling? No default! No catastrophe!

Where is my thinking wrong about this? Someone explain it to me PLEASE! Could it be that Uncle Sam is really not SERIOUS about cutting spending?

6 comments:

  1. The best way I can explain it is like some people with a credit card. They have a $5,000 limit, they spend that amount and only pay the interest each month. At some point the credit card company increases their limit to $10,000, and they keep spending and only paying the interest, and on it goes. Only with the credit card company they can't keep spending unless the limit is increased, and the credit card companies are not stupid (like Washington) so they don't do that until the customer pays down their debt. Again unlike Washington

    Debbie
    Right Truth
    http://www.righttruth.typepad.com

    ReplyDelete
  2. That's exactly what I'm thinking about: where my paychecks go for the past years. One solution that I came up with was to pay all my debts before I start making all the adjustments. I now choose to apply for Wisconsin payday loans whenever there's an emergency. There's a budget allotted for every month as well.

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  3. What is a Pension Backed Loan? can you explain every thing about this.
    pension loan

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  4. please provide some information about various types of pension funds.

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  5. Dear Pension Funds,

    Do I look like a financial adviser?

    ReplyDelete