Thursday, November 04, 2004
To put these enormous numbers into perspecitve, imagine that the govenment earned $25,000 per year, instead of the roughly $1.85 trillion it expects to generate in revenue in 2004. The federal government's situation is analogous to you having burned through the majority of your $100,000 credit line and then turning to your credit card agency and asking for a credit limit increase of about $10,000 to pay the bills.
At a press conference today, the President said not to worry about the fiscal situation of the country. In fact, he says, he's got it under control. He's submitted a budget that will result in the government falling deeper into debt at half the rate it is today within 5 years.
I doubt any reasonable loaning agent would take the risk of loaning to a debtor who already owes 400% of his annual income an additional 40% of this income when the debtor has no plans to start spending less than he's making. However, I may be wrong; I'll admit I haven't tried anything so harebrained. Fortunately for the President, Congress, which is effectively the lending agent in this case, has just received a mandate from its employer to keep on doing what it has been doing, and consequently is positively disposed to offer up more credit. Mind you, Congress specifically didn't offer the credit limit increase until after it had passed its biennial performance review.