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March 29th, 2012
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Letters to the President #1165: 'In debt we trust'

Reporter's Note: President Obama has a whole team of economic advisors. I’m not one of them. Not even secretly.

Dear Mr. President,

It takes a good bit to surprise me these days. I’ve been in the news business so long, and I’ve seen so much shocking, irresponsible, unthinkable and/or illegal activity, that I hardly raise an eyebrow anymore. Public official nabbed ripping off taxpayers? Been there. Seen that. Researcher faking evidence in a study? Snoozeville. Member of Congress caught in a hotel room with a strange woman and an even stranger goat? Snore.

And yet today I saw an article that made me sit up a tad straighter. In a nutshell, it said we may have seen the last balanced federal budget of our lifetimes. At first, I assumed that I was misreading. Certainly, this could not be the case! Turns out, however, that I was not mistaken. We’ve apparently dug the hole so deep that we may never crawl out again. Now, all we can do, according to some economic types, is manage our debt, never escape it.

I find that startling and depressing. Have we really strayed so far from basic ideas of, oh say, buying only what we can afford, and spending only what we can earn? I’m not trying to beat some kind of partisan drum here. I’m not even hinting at blaming one party more than the other for this, although perhaps one deserves more blame in the big picture. All I’m saying is that it is astonishing to think that we have somehow wound up in a position where we have to simply abandon the idea of ever again being out of debt as a nation.

I interviewed a woman years ago who had made some disastrous mistakes with her personal finances. She’d been given a big promotion at work, so she bought a fancy car, a new house, lots of expensive clothing. Then she had some unexpected medical bills, and lost the big job. Her income and savings plummeted, but her tastes did not. She continued to take luxury vacations and buy things to keep up with her ritzy friends. Before she was thirty, she had a $30,000 debt on her credit card, and was well on her way to never recovering financially.

She met with a debt counselor her talked her through the tough steps she needed to take; telling her how she had to cut spending, sell off things she could not afford; start saving and steadily whittling down that debt no matter how much it hurt. When we met, she was several years into that process and thrilled to know that she was only a couple more years away from breaking even.

I don’t know if a nation can actually do such things to defeat its debt. My common sense says it ought to be possible, but when you start talking about hundreds of millions of people and trillions of dollars in taxing and spending, I’m pretty sure the rules start changing. I’ve also read that plenty of economic types have now reconciled themselves to the idea that we really don’t need to ever be debt free again. Honestly, I have a hard, hard time understanding how that will work. At best that seems to involve forever paying interest on money that we’ve borrowed, which just seems foolish.

Oh well. I suppose if I understood it all you’d be calling me every other day so I could help sort things out. But I don’t, so I certainly hope you do…or at least someone near you does…because the idea of being under that kind of debt for eternity seems daunting to say the least.

Regards,
Tom

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