The Titanic was unsinkable.

Yesterday, Senator Hillary Clinton visited San Francisco to headline a Democratic fund-raiser. During her remarks, she made an interesting comment. Consider:

“Many of you are well enough off that … the tax cuts may have helped you,” Sen. Clinton said. “We’re saying that for America to get back on track, we’re probably going to cut that short and not give it to you. We’re going to take things away from you on behalf of the common good.”

Ignoring the obvious point that she is not a mother hen who can “take things away”, I’m going to move on to the productive aspect of my concern. Senator Clinton, please explain “the common good”. If you mean that we’re going to work to be fiscally responsible by reducing spending, ending the deficit, and repaying the national debt, I accept that definition. If you mean increasing revenue, ending the deficit, and examine the national debt, then I do not accept your notion of the common good.

I hate taxes, but no one will say they love taxes. I love fiscal responsibility, but no one will say they hate fiscal responsibility. We agree on basic ideas. However, the federal government is not entitled to any specific amount of revenue monetary inflow. The federal government’s role is to do things for the citizenry that it can’t or shouldn’t do for itself: national defense, public education, infrastructure, etc. But now, thanks to spending increases and tax cuts, we see an additional, expanding item added to the federal government’s responsibilities that shouldn’t exist: servicing the national debt.

We do nothing to reduce this balance. Indeed, in the last few years, we’ve increased it. We don’t stop spending, though. It’s irrelevant that the interest payments will continue to grow. We don’t care that this will become an economic tumor, consuming more of our nation’s wealth the longer it is left unchecked. This must stop.

During my undergraduate years, I created a debt mountain for myself through irresponsible use of credit cards. This cycle continued throughout my 20’s as I made payments that covered interest without touching principal, while continuing to spend on credit for necessities. I struggled like this for years until I began to earn a higher income. Once my income increased, I stopped struggling, but I continued to pay the consequences of my previous decisions. As I contributed more to principal, I watched my debt decrease. That lasted for several years. One day, after much discipline, I paid my last credit card debt in full.

The part of that story that is ignored is the true impact. As my income rose, I didn’t increase my spending. I didn’t get to enjoy the new cars, clothes, and computers. While many of my friends were able to acquire these items, my spending remained at my poorest levels. When my friends bought houses, I did not. I’d earned as much as them, but I wasn’t able to save for a house. I still rent the house I live in.

I don’t regret my mistakes because they’ve given me the life I have now. But I do not perpetuate them. As a nation, we’re perpetuating our mistakes. We believe that we’re invincible and no harm can occur from our debt. The dollar is the most respected currency in the world, but that doesn’t guarantee its future. We have to begin treating our economic future with respect and understand that our debt cannot continue to grow. America has acted like a trust fund baby for too long. Changing one side of the tax inflow/outflow equation is insufficient.

3 thoughts on “The Titanic was unsinkable.”

  1. Amen. I’m on the path to financial recovery myself. When I first started making “serious” money, I wanted to live in my own studio on the waterfront, but then I realized I wasn’t being responsible to my own debt. So instead, I’ll stay put another year and actually pay off my credit card debt in full (target date: May 19, 2005, my thirty-second birthday). My FICO score of 700 will hopefully increase to above 750 as a result.
    My brother — who makes considerably less as a pizza delivery guy and part-time junior accountant for Papa John’s in expensive San Diego — has no debt other than modest student loans. He doesn’t make unnecessary purchases and always pays his credit card bill in full every month. He has always lived within his means; I (and you, as noted above) wish I could say that same.
    I’ve always admired Suze Orman and her “message.” She speaks to how the citizenry’s fiscal irresponsibility will eventually lead to irreversibly high interest rates as the government continues to pile on the interest. Instead of investing in our collective future, we’ll barely be managing it. I hope we don’t reach that point.

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