Debt Writ Large
September 21st, 2011
Sitting at the kitchen table trying to wrangle your bills into something that isn’t nausea-inducing can be one of the loneliest situations. Hard to believe, then, that there are millions of others out there essentially facing the same problem.
Even Uncle Sam.
No, really. Think about it — the debt ceiling crisis last August? On one level, that whole national debate was what a lot of households are dealing with on a personal level: “Do we have enough money to cover our obligations? If we don’t, where are we going to get that money from? If we can’t get it, what’s going to happen? And if we do get it, how much is it going to cost us?” Sound familiar?
Oh sure, there are differences. After all, whatever debt our government agrees to will ultimately impact interest rates that consumers are paying. Many people predicted that if the debt ceiling wasn’t raised, the country’s credit rating would be lowered, making government bonds riskier investments and resulting in rising interest rates for all manner of consumer debt, from mortgages to car loans. There would be a ripple effect through the entire economy as it affected the cost of money. Obviously, our own personal debt doesn’t have such wide-ranging effects.
Still, the similarities between personal and national debt are striking. In both, we have to look at the amount of money coming in. We have to look at expenses, and we have to decide whether we can bring in more money to cover our expenses. We even ask ourselves the same questions: Are there expenses we can cut out? Where can we find other revenue? Is there an opportunity somewhere to borrow money in order to cover our obligations? Should we be considering something like bankruptcy? Have we overextended ourselves? And as the drama in Washington, D.C., demonstrated last month, almost invariably there are several opinions as to how to resolve these problems as well.
You could even argue that a credit score is like our country’s credit rating, since if either is lowered, the cost of money — be it on a personal or national level — is going to be higher.
These are all things that a lot of families at their kitchen table have to deal with, and the nation is going through them on a grand scale.
And probably a much larger kitchen table.
