In just a little more than six months, the U.S. national debt has grown by a $1 trillion dollars. Today, Congress will debate on a $1.3 trillion “Omnibus spending bill” to fund the government through the end of September of this year.
As noted by Robert Schroeder:
Excessive borrowing by companies, households or governments lies at the root of almost every economic crisis of the past four decades, from Mexico to Japan, and from East Asia to Russia, Venezuela, and Argentina. But it’s not just countries, but companies as well. You don’t have to look too far back to see companies like Enron, GM, Bear Stearns, Lehman and a litany of others brought down by surging debt levels and simple “greed.” Households too have seen their fair share of debt burden related disaster from mortgages to credit cards to massive losses of personal wealth.
It would seem that after nearly 40-years, some lessons would have been learned.
Apparently not, as Congressional lawmakers once again are squabbling on not how to “save money” and “reduce the federal debt,” but rather “damn the debt, full speed ahead with spending.”
Such reckless abandon by politicians is simply due to a lack of “experience” with the consequences of debt.
In 2008, Margaret Atwood discussed this point in a Wall Street Journal article:
“Without memory, there is no debt. Put another way: Without story, there is no debt.
A story is a string of actions occurring over time — one damn thing after another, as we glibly say in creative writing classes — and debt happens as a result of actions occurring over time. Therefore, any debt involves a plot line: how you got into debt, what you did, said and thought while you were in there, and then — depending on whether the ending is to be happy or sad — how you got out of debt, or else how you got further and further into it until you became overwhelmed by it, and sank from view.”
The problem today is there is no “story” about the consequences of debt in the U.S. While there is a litany of other countries which have had their own “debt disaster” story, those issues have been dismissed under the excuse of “yes, but they aren’t the U.S.”
As I discussed recently in relation to the tax cut/reform package passed by Congress last year:
“Of course, the real question is how are you going to ‘pay for it?’
Even as Kevin Brady noted in our interview, when I discussed the ‘fiscal’ side of the tax reform bill, without achieving accelerated rates of economic growth – ‘the debt will balloon.’”