In the good old days people only bought what they had money to pay for but that was before the days of the credit card. Now, when people don’t have ready cash on hand to buy something, they simply use plastic money. Of course, each month they get a bill for the things they bought so, in the end, they still have to spend real money.
However, too often, when this bill comes due, most people don’t have the money to pay it off, so they pay only a part of it and frequently, a very small part. But, because the company allows them to continue using their card, they do. However, the problem with this is that, in time, they get themselves so far in debt they can’t possibly pay it off. At that point, the credit card company refuses to let them purchase anything more and when that happens, people have no other choice than to buy all future purchases with whatever money they have on hand.
There are only two ways to remedy this problem. The first is to cut back on spending and the second is to save up enough money each month to pay for what was bought. If this isn’t done then eventually they will be so far in debt that they won’t be able to buy anything.
We all understand this principle but apparently, there are people in Washington who think it doesn’t apply to the federal government. Right now they are spending 40% more than they take in on taxes and every year they have to borrow that extra money from someone willing to lend it to them. But, instead of cutting back on their spending so they can save enough to pay off their debt, they spend even more, thereby needing to borrow more. At some point they will be so far in debt they will no longer be able to borrow any more money. When that happens the country will be bankrupt.
When an individual goes bankrupt, it is the individual who gets hurt the worst. When a company goes bankrupt, it affects not only their employees but their shareholders as well. But when a government goes bankrupt, so does everyone in the country. What the Tea Party movement wants is for our government to follow the same principles of good money management that we have to.