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When families go deep into debt

February 21, 2013


Six years ago a family made $25,680 but spent $27,290 that year, increasing their debt $1,610. They already had debt of just over $90,000, and the head of household realized they were continuing to go into more debt every year. He calculated how much they spent just on interest and was surprised to learn they had paid about $430 in the past year.

Over the next six years the family’s expenses begin to rise radically, but their income fell due to a bad economy. In 2008 they made $25,240 but spent $29,830; in 2009 their income dropped to $21,050 because business was bad, but they spent $35,180, having to borrow more than $14,000 just for living expenses.

The head of household wasn’t worried. The economy was beginning to pick up and he hoped business would improve. Over the next few years his annual income gradually increased: $21,630 in 2010, $23, 020 in 2011, and 24,490 in 2012. However, he kept spending more and more on his family, borrowing nearly $37,000 over three years, and his total debt grew to nearly $170,000.

By now you’ve surely guessed the head of household is fondly called Uncle Sam, and if you add five “0s” to the numbers above you’ll have America’s revenue, spending, borrowing, and debt in numbers more fathomable than trillions being thrown around in Washington.

President Obama and other progressives in Washington say they need to spend even more money this year than they have in years past because the family just needs more stuff. They also say that the next generation can pay for the debt we’re increasing every year. It’s no big deal. We have plenty of credit.

The sad part is America is not the only family in the world living off credit. Other nations have been forced to cut back on borrowing money for their livelihoods and to repay what they’ve borrowed. To do that, they’ve had to stop buying stuff for their families. In fact, they’re barely able to put food on the table and they no longer have credit to pay for vacations and family outings that used to be so much fun.

As one might expect, some of the spoiled children in those families are acting out, demanding that the grown ups give them more stuff just like the grown ups had when they were kids. But, the grown ups can’t borrow any more money because nobody will lend them more money.

Back in our American family, few believe we’ll ever have to cut back like those other families. In fact, the grown ups who are heading up our family keep telling us that maxing out our credit cards is a good thing, that spending more and more money is really good for the economy, even if we’re having to borrow that money. After all, we can afford to pay the interest, and when we need more stuff we can just charge it.

One has to wonder what the next generation of grown ups will think about this generation of grown-ups.

Daniel L. Gardner is a syndicated columnist who lives in Starkville. Contact him at

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