American families understand this concept. If you take out a second mortgage, max out your credit cards, and spend your parent’s retirement and your children’s college money, taking out another loan does not make a lot of sense. In fact, most banks probably would not give you another loan because you obviously don’t have a credible strategy to pay off your previous debt.
Amazingly, the federal government is proposing to do just that. After racking up $14 trillion in debt, jeopardizing the social safety net and our children’s future, they’re going back for more. Alarmingly, the International Monetary Fund pointed out that America lacks “credible strategy” to deal with our debt.
Our nation is not spending prudently; this year we are running a $1.6 trillion budget deficit. We haven’t demonstrated any fiscal responsibility; the U.S. public debt is 97% of our nation’s entire economic output.
Financial analyst Mary Meeker has created a series of financial statements for the United States government as if it were a corporation. She found our national debt to be more than three times greater than our government’s assets.
That’s alarmingly high, especially compared to some real companies.
Morningstar gives Microsoft a AAA credit rating. Its debt is about one-tenth of its total assets. UPS has a A+ rating. Its debt is about one-third of its assets. Ford Motor Company has a less than stellar BBB- rating. Its debt is only about five-eighths of its assets. Our government’s debt-to-asset ratio is five times higher than Ford Motor Company. That is not good!
So let’s be very clear: conservatives are not playing with fire. The fire is already raging and threatening to burn down the house. The alarm bells are going off with increasing frequency. The only question is whether anybody in Washington will listen.