I remember the days in early 1982 when the “oil depression” hit Texas and the gulf coast.
I was sitting in the office looking at my accounts receivables and growing more alarmed by the day at just how high they were becoming. With what business I had left being added to the pile daily, it was growing larger and larger.
The problem was that I was looking at money that was not being received (nor, as I found out later that it never would) was piling on top of the good money. Eventually bankruptcy filings from my customers started coming in and it was at that time that I developed a firm grasp of “real world” cash flow and how to survive such a disaster.
The only reason I kept the business from going under was the fact that I NEVER financed it for any reason. It was built one dollar at a time and still survives after 32 years of operation. There was never anyone there to “call my note” from the banks.
Now, the whole Government is facing the same thing. Revenues are less than the expenditures. Simple as that.
The Government’s solution to the problem is to keep on spending but worse yet......it’s all financed and the interest expenses are rising faster that the funded debt. Now, they want to raise the credit limit so they can spend more by borrowing more. It’s like making the minimum payment on credit cards while the balance keeps going up as each payment is made. The end result will be simple bankruptcy. There is not way to prevent it while this attitude continues.
While this is a simple comparison of a small business to the government, the principle is a comparison of a private (for profit organization) verses a governmental entity (an appropriated funded entity) and how out of the real world our government operates.
The fact is that the debt our government owes will never be balanced due to the fact that government managers (elected officials) only pay attention to staying in office and that means satisfying the most important voters...THE LOUD ONES. The ones who make the most noise...not the ones who mind their manners and quietly present their needs and proposals.
Until we have two important constitutional amendments added, (1) the requirements for a balanced budget and (2) TERM LIMITS, will the problem ever be corrected.
I doubt that either one will ever be enacted simply because we have the fox guarding the hen house.