Papered Over With Loans
Published: February 22nd, 2010
By: Tom Morgan

Papered over with loans

You do not need a degree in economics to understand the financial dilemma we face. Just imagine your family in this situation:

Over the years you increase your income by 32 percent. You increase your spending by 221 percent.

That is all you need to know about what ails us and ails a good part of the world.

Since 1970 Washington has increased its spending 220 percent, adjusted for inflation. Since 1970 median household income has increased only 32 percent.

Now, step back and imagine your family was worth millions in the 1920’s. Beginning in 1932 or so, the family increased its spending rapidly. While its income edged up only slowly. The family papered over the deficits with loans.

That is what happened in this country. Our horrific situation did not come solely from the spending increases of the last few years. It came from the increases that began in the 1930’s and never abated. The country papered over the deficits with loans. Otherwise known as the national debt.

If your family was in the situation described above you would know it cannot continue down that path. The interest on your debt has snowballed. The pressure on your income has grown too great.

The country cannot continue down its path. It cannot afford to pay what it has promised. Not in Social Security. Not in Medicare. Not in debt repayments. No can do.

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