I summarized the following points for Debtors Anonymous discussed at psychology.com:
1. Lack of clarity about your financial situation.
2. Poor saving habits.
3. Compulsive purchasing on impulse.
4. Struggling to meet basic financial obligations.
5. Living in chaos and drama around money.
Let's look at how our government meets these points.
"Lack of clarity" - the government spends about $44,000 USD per second (from my post "Epic Debt Fail"). It turns out that the government makes about 114,000 payments per hour across all of its systems: social security, welfare, medicare, military, and so on. These systems are designed, mind you designed, not to stop paying and not to be able to stop making a particular kind of payment. There is no accounting mechanism to control this either.
So one of the reasons the country cannot weather a violation of the debt limit is that it cannot "manage' its payment system in a meaningful way. Unlike you, who if you lost your job, would probably still be able to buy food but might stop paying first credit cards, then cars, then mortgage, and so on as things got worse, the government can pay all its bills or none - there is no middle ground.
Because about $20,000 USD of that $44,000 USD is borrowed each second you basically have a direct flow from Treasury U S Bond sales to the check printer. And because there is no concept of different "systems" that can have their payments "managed" (i.e., stopped or slowed down) you have your basic financial train running down the track out of control.
To put it another way imagine that about 45% of your blood is draining out of your body at any given time and the only way to stay alive is to eat and drink enough food and water to replace that blood supply. Because you cannot stop the blood flow you must keep eating or you will die.
This is our government on point #1.
"Poor saving" As I wrote before the Social Security system has no cash (I do not believe that the US Government itself has any savings plan either). Its all been loaned to the part of the government that, as I describe above, writes checks. I imagine the same is true for the Medicaid and Medicare. I think no savings qualifies as"poor savings" and telling old folks their future is safe when you have nothing but a safe full of IOUs from an out-of-control financial train wreck in progress ices the cake.
This is our government on point #2.
"Compulsive Purchasing" As if #1 and #2 above aren't bad enough we have the Obama administration spending trillions on health care and stimulus. Purchasing things on borrowed money when you have no money and no means to payback the money you owe (remember confiscating all the money earned by all the people and companies in the US for one year pays off only the current deficit) seems to fill the bill. Certainly if your credit cards were maxed out and you went out to buy a new expensive patio set it would qualify. Same here for the government.
Now you might argue the government can "raise revenue" to cover the short fall and you would be right. The current deficit is some few trillion dollars and the GDP is about 15 trillion. This means you would be confiscating about 8% of everyone's income to pay off the debt for the current year. The trouble is that only about 1/2 of all people in the US even pay taxes so you would have to raise the tax rate on those who do to 16%. But of those who pay taxes only about 5% pay 80% of the taxes so you would have to change the tax rate for the very top earners to 160% of their income, i.e., they would have to pay more taxes than they earn.
So this is like selling off the kids, their clothes, your retirement, your mom's retirement, and everything else you can get your hands on just so you can shop for more "stuff". (My grand kids each owe about $50K USD today.)
This is our government on point #3.
"Struggling with day-to-day finances." Not so much of a problem when you can print your own money - at least on the surface. But remember, every second we go into debt $20K USD. If you made 50K a year ($4,166 per month) but needed to borrow $1,700 each month just to get buy on food, clothes, car payments, etc. I would argue you were struggling day-to-day. You might not if you were doing it but you would be in denial.
Our government on point #4.
"Living in chaos over money" Turn on the news. Today the US is threatened with a poor credit rating because of its irresponsible borrowing habits. We've maxed out the "new low rate" credit cards and now we're into the 25% annual rate cards. What more chaos do you need? Both sides propose a meager 3 trillion in savings over 10 years - so $300 billion a year. We are going in the hole more than that each year and are projected to for the next 10 years.
That's like saying on my $50K ($4,166 monthly) salary where I borrow $1,700 each month I will instead "make a hard cut back" and borrow only $1,200.
Duh?
Only a moron would imagine that doing this would solve the problem.
Certainly it reduces the problem - but my grand children are still $50K in debt. This just makes reaching $100K in debt take a little longer.
Our government on point #5.
This is total, absolute insanity!
Debit addiction for sure.
And where are the adults?
The US Government is like kids on drugs run amok with mommy and daddy's credit and bank cards.
Will anyone stop this? Or will will just sell off the house, the car, grandma's house and car, the other kids so finance this spending spree? (This is what enablers and those that are co-dependent do - rather than face up to the actual problem simply finance the on-going destruction instead - its less confrontational and hey, credit is cheap.)
Some argue "we owe it to the seniors" - and to a point we do. But government has promised grandma that it instead of grandma's family it will support grandma in the future - using money it does not have nor will have unless it takes it from others and the grand kids.
Do you think grandma wants to see the grand kids sold into slavery?
What kind of promise is this?
Do we owe it to the seniors to the point of putting the kiddies and grand kiddies in debtors prison (saddling them with a crappy government interest rate, stealing their future, etc.)?
The only cure for addiction is for the debtor (in this case the US Governmetn) to hit what they call "rock bottom" and discover that the debtor is responsible for their own actions as well as the consequences of the those actions.
Until someone in the Whitehouse or Congress does we are all doomed to sit at the Debtor's Banquet.
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