(Yes, this is overdue; I’ve been otherwise occupied, including with making my own finances stretch to cover an adoption trip to China before the end of the year.)
In a dual-Navy household, the comparison of the proverbial “spending like a drunken sailor” and the situation with our federal debt was inevitable. Lately, however, we have had to caveat it with the follow-on comment, “and that’s an insult to drunken sailors.”
The problem is, as any former division officer or chief could tell you, that the inebriated and overspending sailor often comes with a wife and kids. If he’s young, single, and lives on the ship even in homeport, you can just laugh at him for not having a dime left to spend in the next liberty port. If he has a family, however, now you have to find out just how badly he wrecked the budget and how long this has been going on. We all heard the cautionary horror stories about spouses living without electricity or a working car because their sailor spent the money on beer and fun overseas, while the Navy made sure his lights and food kept coming.
Unfortunately for us, Congress is the drunken sailor, and we’re the spouse left dealing with the consequences.
We have a copy of Schoolhouse Rock that we bought for the kids around the last election. My kids think “Tyrannosaurus Debt” is pretty funny. I thought it was pretty funny that the song commented on the debt having “already reached five trillion dollars, and it could go higher!” Yes, Schoolhouse Rock is decades old, but the debt has more than doubled. If you count all the promises we’ve made for pensions and entitlements, the federal debt is actually much, much worse.
Many states aren’t much better off. Although some states are required to live within their budget (apparently not including California), they get around that by not funding their pension funds. So, they get to pay lower salaries to police and teachers today for the promise of a really nice, fat pension later… except that the politicians then spend the money on other things they want and leave the next guy in office to figure out how to pay for the pensions (or, more often, how to pass the bill down again without paying on it).
The saddest part of this is that it has rubbed off on the average American. Our savings habits would be atrocious, if they weren’t nearly non-existent. AARP, I have been informed, advises people to spend all their money before retirement; that way, the federal government has to give you a bigger Social Security check because you’re penniless. (Oh, yeah, I want the federal government in control of my retirement! Not.) Dave Ramsey will inform you that surveys show that more people under thirty believe in UFO’s than believe they’ll ever get a penny from Social Security. It’s a Ponzi scheme, and everyone’s known it for decades, but most people want to believe that they’ll get “their” money and their grandchildren won’t get ripped off.
Unfortunately, wanting to believe that the grandchildren will get social security, too, so you can go ahead and soak the system for all you can get doesn’t make it so. Eventually, the states will have to face the fact that they drove themselves into debt by promising pensions they weren’t saving for, even if the accountants said that technically it isn’t a debt until it’s due. And the federal debt has been something we should have dealt with decades ago.
Instead, we kept on spending, hoping that the economy would expand or something would happen that would just make the problem go away.
Guess what? It didn’t.
Last week, I read an article about some major Chinese official dressing down the U.S. for getting its credit rating downgraded. Understandably, the Chinese are a bit worried about losing the money they’ve loaned us. The official lectured the U.S. that it could no longer borrow and spend its way out of the problems it had created for itself. (Given China’s egregious human rights abuses, I hate to say this, but we could really use someone with that attitude in charge of our fiscal policy!)
Underneath that, the article quoted several other countries’ finance ministers’ comments on the situation. Great Britain’s finance minister weighed in by condescendingly noting that the U.S. stupidly brought the downgrade on itself by not raising the debt ceiling more promptly.
Really? That’s sort of like our initial drunken sailor blaming his wife for dragging her heels and insisting he get his spending somewhat in check before she agrees to call the credit card company to get the credit limit raised. She’s trying not to be an enabler to his spending addiction, especially since it is adversely impacting her ability to feed herself and the kids.
Her insistence that the spending has to be decreased, not just increased more slowly, is not the problem. The problem is the spending addiction.
Given what currently passes for the “more restrained” political discourse the president has demanded, I assume at this point the sailor would loudly denounce his wife as a “hobbit” and a “terrorist” for trying to interfere with his spending habits, which are obviously so necessary to bailing out every bar owner from Marseille to Bahrain, and then get his buddies together to complain about how stupid she was for not understanding modern economics and accounting practices. (Although I hope the sailor, unlike the president, would also be willing to apply the word “terrorist” to the real terrorists, too.)
As a nation, as states, and as families, we have often chosen to have our fun now and let our kids or grandkids pay for it by failing to save for the future bills which we know will come. At some point, we have to put our foot down and declare, “IT STOPS HERE. The disaster was handed to me, but I will not pass it on to the next generation.”
I just finished Dave Ramsey’s Total Money Makeover. As he says in the introduction, there isn’t any financial advice you couldn’t get from the Bible or your grandma, but the old common sense isn’t very common any more. On the one hand, it was dangerous reading, because I kept looking at the case studies and saying, “Wow! We are nowhere near as in debt as that guy!” On the other hand, though, it was inspiring to think of being totally debt-free, not having to look at the bills for the fun the month after the fact but having the money to pay up front. To have enough saved to pay cash for cars. No mortgage. Wow… that’s a nice thought, isn’t it?
Maybe we should require every member of Congress to read the Constitution and Total Money Makeover over the summer and winter breaks every year. They seem to have nearly completely forgotten the principles they’d find there.