About ten years ago, my cousin told me of his bankruptcy settlement. I wondered how it was possible that he could have so much debt forgiven and still keep his house and his truck. I figured I’d wait and see. When we were kids he had been so hyperactive and impulsive that I could only hang out with him for short intervals before feeling so drained I had to keep my distance for several months. He had moved to Florida and I hadn’t seen him for a few years, but he called me every month or so and even his phone calls left me feeling tired.
He had told me a couple of years earlier that he had over $40,000 in credit card debt and I was shocked. He had owned a house in New Hampshire at the time though I don’t know what the mortgage was. We were riding in his then-new, four-wheel-drive pickup truck equipped with every option, and I didn’t think he and his wife together made $40k in a year. He said he was worried and I could believe that. I wouldn’t have been able to sleep if I were in his shoes, yet somehow, he was able to sell his house in New Hampshire and buy another in Florida, and that’s where his questionable bankruptcy judgement was made. It was all difficult to swallow and that’s how it had always been with my cousin.
I’ve been thinking a lot about him while watching the debt talks in Washington. My cousin said he was able to keep his house and his truck, and if he was, it was only because his creditors had to eat his debt. Others would have had to pick up the slack for him because he wouldn’t discipline himself enough to control his spending. I believed he would get himself right back into debt again if he were ever issued more credit cards - and I don’t see our government behaving any differently either unless we pass a balanced budget amendment to our Constitution.
The eleventh-hour budget compromise in Washington will supposedly prevent bankruptcy for the USA, but I’m not confident it will. How can this congress bind future congresses for the next ten years? Doesn’t the Constitution allow them to tax, borrow and spend under Article I, Section 8? Without a balanced budget amendment they can do what they please and I don’t trust them to change any more than I do my cousin. Both sides claim there are huge cuts to government spending included in the compromise. How can that be true when the plan adds $7 trillion to the debt over the next ten years? Presidents and congressional leaders set off my internal BS alarm just as much as my cousin always did. The way they conduct their personal lives is similar too, but there’s not enough space in this column to go into any of that.
My cousin depended on everyone else when he went belly up, but if the USA goes bankrupt, who would save us? China? According to one Chinese official, we’ve already defaulted on our debt to them because we’re paying interest on it by printing dollars that are worth less than the ones we borrowed. US Federal Reserve Chairman Ben Bernanke likes to call it “quantitative easing” but you could also call it counterfeiting. He reminds me of my cousin too.
Another of our creditors, Russian Prime Minister Vladimir Putin, said the other day that: “They [Americans] are living beyond their means and shifting a part of the weight of their problems to the world economy.” The way he describes us Americans, we’re all seeming more like my cousin, no? Putin went on to say, “They [Americans] are living like parasites off the global economy and their monopoly of the dollar”
Is he right? I’m afraid he is. How did we get to the point when a communist Chinese official and the former head of the Soviet KGB are making more sense than the US Federal Reserve Chairman and the President of the United States?
As I think about all this, it occurs to me that, for decades, my cousin would call me after a long hiatus and I would go and hang out with him again. It also occurs to me that we Americans keep electing presidents and members of congress who act like just like him. I believe Pogo was right when he said: “We have met the enemy and he is us.”
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