Author: Shannon Rodgers (25 Articles)
Do you make the minimum payment on your credit card(s) each month? I do. If there is any left over, I pay extra on the account with the highest interest rate. If I asked, would you loan me your money if you knew I would use it to make minimum payments on my credit cards and I offered no plausible plan to pay you back?
Do you do what we are encouraged to do, and pay off your balances each month? Do you not borrow more than you can pay off each month? If so, God bless you, but the following will cause your head to hurt.
When the federal government spends more than it takes in, it is called a deficit. They (we) borrow the difference. Congress wants to raise the debt ceiling, the limit on their (our) credit card, so that they can make the payments on our existing debt. They want to do this in a year the deficit has doubled. Spending is up, revenue is down, and Congress wants a credit limit increase to pay the minimum payments on the difference. What a gig!! They set their own pay, set their own credit limits, and do not have to pay the payments – ever!!! They tell us they expect tax increases on the rich to pay for all of this and more.
Want some perspective?
I have seen this, which I cannot independently confirm, so correct me if you are good with numbers: If we collect a 100% tax on the profits of ALL of the Fortune 500 companies, it would take 145 years to pay the principle.
The principle is 12 trillion dollars by the way. Heard of the rule of 72? At 3%, which is what I expect we pay on federal bonds, the principle doubles in 24 years. That means to me, we cannot tax the rich more, enough to pay off the debt before it doubles.
Do you not agree that making the minimum payments is a bad idea? Are you OK in lending them more money to make the minimum payments with no plausible explanation of how they intend to pay it back?