Tuesday, August 2, 2011

Debt, Money, & its Future Legitimacy...

Welp, congress passed a bill to raise the US debt ceiling, so all is right in the world! Or perhaps not. I'm no economist or congressman, but the entire system seems like a fabrication with nothing solid or backing that resembles any sort of reality.

For example, last Thursday CNN made THIS one of the headlines with regards to solving our problems with raising the debt ceiling. Essentially it proposed that the Treasury could mint two ONE TRILLION DOLLAR COINS that we could then take loans against. How can we just print without anything tangible to back it up? The coins aren't really worth a trillion each...unless there's a really expensive metal that hasn't made the periodic table yet.

I understood the minting process when we were backed by a gold standard, but these days, that is long gone. Money seems to be an idea, almost an afterthought, and I question its future legitimacy.

To top that, how does the US gain global financial confidence by raising the amount of debt we can incur, without ever paying it off? (this isn't the first time we've done this - and the vote is estimated to only last us through Thanksgiving!)

How will we ever stop this exponential debt crisis without making significant cuts? I understand that we may have to even cut really good things. But a few years ago, Kate and I decided we were tired of having debt, so we made a budget, stopped doing some of the things we "needed" to do, and have now been debt free for several years. This is how it works in real life! And now our chains are gone, and that feels good.

Right now, Kate and I are hoping to take a European vacation for our 10 year anniversary, which is coming up. That's a really good thing! BUT, if our budget becomes too tight, we can't do these really good things, we have to take care of our budget, and will have to put it off until it makes sense financially. That's how the world operates in reality - good things are put on hold when there's no money to back it up. Unless of course you can print trillion dollar coins...

Peace,
Ross

5 comments:

Chris said...

well, Jesus just "minted" loaves and fish to feed five thousand people so I really don't see the probably making trillion dollar coins to feed the people, and give them HD TVs.

fbcyouth said...

I have the same feeling...I wonder if congress men and women run their own household like they run the government? Who adds more debt to actually pay off debt (people with their own agenda do). Thanks for the article... my wife and I are in the process of getting out of debt and it is a good feeling to do without now so we don't have to the rest of our lives!

Living on Love said...

While I see your point in making cuts, I will say government funding is at a much larger scale than family budgeting. A cut in our spending means a cut in fun activities or nice foods. A cut in the government spending will mostly likely cost people jobs (think teachers, various social workers, government employees). Also, b/c immigrants and refugees don't have a voice, we will see the end of our nation's refugee programs and other immigration services. And schools will mostly certainly see a drop in budget. That being said, the amount we spend on military and wars (much of which has created refugees) is astounding and should be cut both to balance the budget and to stop creating a need for bigger and bigger military (stop creating more terrorists). I say, cut military spending and funnel 1/2 the money into overseas relief and infrastructure like schools and roads, into our education system, and into our social services.

PEACE THE HARD WAY said...

The entire debt deal is a sham more Washington/ big business trickery. Why would you raise the debt so you can borrow more? Isn't excessive spending what got us into this to begin with? This "change" is nonsense it defies the logic of common sense.

Living on Love said...

After listening to NPR, I've changed my stance. We're screwed. At first I was excited there was a deal and not a government shutdown b/c we're going to Rocky Mountain Nat. Park this weekend. No government, no parks. But the deal has no plans for revenue (they kept all tax loops holes for the rich that got us where we are). So this means the middle class and poor will be taxed more while many of the programs they depend on will be cut. Time to move to Canada.