Believe you me, Common Sense Conspiracy is sick of talking about the debt ceiling. This concept of the fiscal cliff has been a recurring news item for the last couple of years, and regretfully, the deal that Congress struck just in the nick of time (completely totally predicted by Common Sense Conspiracy, we might add, if we don’t say so ourselves) only puts off the crisis once again to February. So, much to our chagrin, we’ll be talking about this same bullshit once again after we get through the holidays and borrow another trillion dollars or so. Having said all of that, it’s still big news today so we are publishing what we hope is the last article about this for a few months.
Thanks Congress! We’re so proud of you. You did your job! After days and weeks of political nonsense, you did what you should have done from the beginning. No one thought for one second a permanent solution was coming out of this, so why bother? Swipe that card again, and do it faster next time. So, while both political parties in the United States wipe their brows and pat each other on the back for another job well done, let’s take one last look at the absurdity of what has just happened.
The debt ceiling you’ve heard so much about is set at $16.7 trillion dollars. The United States was going to hit that mark sometime around midnight tonight, leading to it not being able to borrow money by its own law. Not because a creditor wouldn’t let them, but because their own law prohibited going beyond that mark. Now, Congress has struck a deal to extend that number so they can keep on borrowing money like mad until February, when they will hit their new temporary limit and have to go through all of this nonsense again.
$16.7 trillion is an astronomical number that we have a hard time relating to as mere mortals where money is not a never-ending water faucet paid for by someone else. Sometimes the only way to really understand what these numbers mean is to relate it to a situation we are more suited to process. So, we crunched the numbers to give you an idea of where America will be at midnight tonight before they voted to keep right on going in the most predictable outcome of all time.
In 2010, the United States government took in a total of $2.16 trillion dollars from a variety of source, the largest being from American workers’ pockets in the form of income taxes. So, this was the amount of money that they had to run on in 2010. Now, the debt ceiling of $16.7 trillion is 7.73 times that number. So, they have the authority to borrow up to 7.73 times the amount they take in during an average year.
Same scenario in more common terms:
The average American household took in $51,144 in the year 2010. So, if the average American family set the same standard that Congress sets for the nation, they would happily incur debt through credit cards and loans up to an amount 7.73 times that number.
$51,144 X 7.73 = $395,343
So, the average American household should see nothing wrong with borrowing the better part of half a million bucks on that salary. Does your house all of a sudden seem inferior? You are not following the government’s example and living way beyond your means. Every average American household should have at least a $300,000 home and then still have plenty of borrowing room for lavish vacations, a $45,000 vehicle, and whatever else you need to round out that $400,000 line.
Okay, now take the scenario a step further. You did set that limit, and now you are up against it. The credit card companies set your limit at $395,343 but you can’t pay that power bill in your $300,000 home on your $51,144 per year salary, so you have been borrowing money to keep the lights on. Now, all you have to do to keep borrowing more money is tell the credit card company you need more room. They happily give you a $500,000 credit line so you can keep on spending and living the same lifestyle as before.
Only, your $51,144 per year salary remains the same.
So, has a crisis been averted? Nope. Do we have a plan to deal with it? Nope.
On second thought, congratulations to Congress for trainwrecking our nation once again right in our face and then having the audacity to pat yourselves on the back and act like you did something great. You are a joke. You are the biggest bunch of pathetic losers to ever walk this Earth, and yet we willingly allow you to continue to have dominion over us despite completely, utterly failing at your job time and time again.