It seems like this editor at the NY Times is saying that deficits are just like mortgages and student loans. This seems like a faulty analogy. Don’t you still have to have the money at the end of the year to pay your mortgage and student loan? The other thing interesting about this statement is that the editor uses the word ‘deficit’. It seems like ‘national debt’ would have been a better term. The deficit is the shortfall at the end of the year. The debt is the total money we owe as a nation-I’m sure I’m forgetting something, but the point stands. A personal mortgage or student loan are more like our national debt on which we pay installments. Regardless, this would seem to undermine the Time’s future rumblings about the amount of money our nation owes. I’m just saying.
“We’re broke! We’re broke!” Speaker John Boehner said on Sunday. “We’re broke in this state,” Gov. Scott Walker of Wisconsin said a few days ago. “New Jersey’s broke,” Gov. Chris Christie has said repeatedly. The United States faces a “looming bankruptcy,” Charles Koch, the billionaire industrialist, wrote in The Wall Street Journal on Tuesday.
It’s all obfuscating nonsense, of course, a scare tactic employed for political ends. A country with a deficit is not necessarily any more “broke” than a family with a mortgage or a college loan. And states have to balance their budgets. Though it may disappoint many conservatives, there will be no federal or state bankruptcies.
The federal deficit is too large for comfort, and most states are struggling to balance their books. Some of that is because of excessive spending, and much is because the recession has driven down tax revenues. But a substantial part was caused by deliberate decisions by state and federal lawmakers to drain government of resources by handing out huge tax cuts, mostly to the rich. As governments begin to stagger from the self-induced hemorrhaging, Republican politicians like Mr. Boehner and Mr. Walker cry poverty and use it as an excuse to break unions and kill programs they never liked in flush years.