Meet the Smith family. They are a family of three with a pre-teen, growing boy. Mom and Dad attend the PTA, do community work and are pillars of the community.
Tommy wants the new iPhone that his friends all have, but there is not money in the family budget to responsibly afford it. Tommy makes a deal with Dad and Mom: He will give up his allowance over the next two years, beginning at Christmastime, in order for his parents to buy the phone. Now Mom and Dad can justify paying for the iPhone without busting the family budget. The deal is made, the phone is bought and the parents know they will have two years of Tommy's allowance payments to offset the cost of the iPhone.
Christmas comes to the Smith family and Mom and Dad feel terrible about their son being without an allowance for two years. So they agree to begin to pay his allowance again. Thus, the iPhone payment deal is null and void, but Tommy still has his iPhone.
What if the same deal happened year after year with Tommy wanting the newest and latest hi-tech gadget? From iPhones to iPads to Kindles, Tommy wants it all. Mom and Dad agree to the deals because they believe Tommy needs these things to be competitive and to stay relevant with his friends.
Will this family go broke? Likely, I suppose. Mom and Dad could get better jobs so more money comes into the household budget. If they can't or don't get better jobs, they could cut other expenses, like their cable bill or phone bill.
Congress has been like Tommy's Mom and Dad for the last decade. They pay for many of the pieces of legislation by saying they will apply tax payments from future years to pay the tab associated with the bill making its way through the Congress.
However, just like Tommy's parents, before the future payments are due, Congress forgives the payment. Members of Congress voting for the various pieces of legislation are told at the time of final passage that the tab is being paid. Technically, they are being told the truth.In reality, sometime in the future, like Christmastime at the Smiths' house, Congress makes the deal null and void.
Remember the taxing of "Cadillac plans" contained in the Obama health-care bill? They get taxed beginning in year 2018 and that money goes to pay another aspect of the bill. However, it is common knowledge that Congress will repeal the 2018 tax before the tab becomes due.
Congress has used this budget bait n' switch six times in this Congress alone. They used it in February 09 to pay the tab associated with the SCHIP bill. This is the bill that expanded the health-care program for an additional 4 million children and women, including first-time legal immigrants without a waiting period. They used it to fund the Hire Act, which provides businesses $1,000 at the end of a successful year in which they hired a new employee. HIRE stands for Hire Incentives to Restore Employment. These are just a few of the big bills besides Obama health care that have benefited by this budget con.
The last time the federal government had a balanced budget, without debt, was a decade ago in 2001. Thanks to the explosion of the dot-coms and congressional spending cuts, the last four years of the Clinton administration saw no budget debt for our nation.
Now fast-forward the tape, and we see the occurrence of the 9/11 attacks, the creation of the Department of Homeland Security, the TSA and the war in Iraq. Our government expenses erupted over the eight years of the Bush administration to a massive $10 trillion debt at the end of his presidency. Now look at the first two years of the Obama administration. Our already giant debt has grown by $4 trillion!
The moral of this story is that Tommy's parents need to stop spending or the family will go broke. The Smith family will lose their home, their possessions and their financial freedom. The once happy, strong and confident Smith family will become wards of the state.
America is following in the Smith family footprints. We will lose our property, our freedoms and we will become wards of China. Yikes!
Elizabeth B. Letchworth is a retired, four-times-elected United States Senate Secretary for the Majority and Minority. She is the founder of GradeGov.com.
