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July 28, 2011

The Tea Party and the family debt ceiling

by beaufou

For many if not all tea partiers, the government is like a family, only it isn’t. When was the last time you met a family that could print its own currency and issue its own debt, then sell it to foreigners as a (once?) reliable and safe investment?
The family argument is nonsense but an attractive line in a political field dominated by batshit crazy people and sold out congressmen – please stop calling those crooks lawmakers, they get paid by lobbies then copy and paste, there’s no lawmaking involved.
But the U.S. government is just like your family. And your family doesn’t run deficits, does it? except the mortgage, the cars and education loans, credit cards… Otherwise, yes, your family is just the same as the Social Security Administration, the Pentagon, the National Institutes of Health, all those.
Here’s the good news though, by 2003, for $10,000 in disposable income, the average family had $11,500 in debt, that’s 115% of disposable income, in 2009, the country’s debt to GDP ratio was 53%, so taking the Tea Party’s view and for the sake of entertainment, the government still has some room to catch up with those ever so responsible families; not that I’m judging, families get into debt because the system is built against them.
Our national debt service to revenue ratio is under 18%. To get a AAA bond rating, the debt service ratio must be no greater than 18%-20%. The Congressional Budget Office does not foresee us reaching – under Obama’s budget – that threshold until 2018. By then, the Bush tax cuts will have expired and our debt service to revenue will be much healthier, so no sweat here either.
Going back to families, the Tea Party is in favor of dismantling the Federal government, privatize Social Security and put an end to Medicare and Medicaid, add to this a sprinkle of Dollar devaluation and the loss of world reserve currency status. I’m sure majorly indebted families will appreciate the program, funny enough, most middle class families are blindingly in favor of budget cuts believing only those at the bottom are benefiting from government spending; fools.
In all fairness, the Tea Party are not the only ones using the family metaphor, the right uses it, the government is the stern father – imagine your daddy taking a 100k loan to blast the neighbor to hell for no good reason – and the left the motherly entity – only that mummy let’s the local rich kids pillage your piggy bank to earn interests for themselves.

When is this general stupidity going to end?

Read more from economy, politics

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