Government’s Credit Binge

Imagine having a friend say to you, “I am having a rough time financially.  There doesn’t seem to be enough to go around these days.”

Empathetically, you respond, “Yes, I know that has to be hard.”

But then your friend says, “Oh, no worries.  I figured out a way to fix things up.  I got several new credit cards.  My strategy is to spend more money!  First, I am going to buy a new car–one of those hybrids.  Then, I am going to make my house all green.  You know, not the color, but “green.”  We’re going to put in solar panels, geothermal heating and cooling, and a bunch of other cool stuff.”

“Interesting.  How much money will that save you?”


“Are you sure?  That seems like an awful lot of money to spend if youare behind right now.”

“Oh, there you go again, Mr. Business.  Always looking at the bottom line.”

“Mmmmmm…yeah.  What happens when you have to pay all this back?”

“Oh, I’ll get the money somewhere.  The future is a long way off.  Besides, I am going green, don’t you see?”

Most of us would question our friends reasoning, even if we were in favor of “green” living.  We know that at some point, those credit cards have to be paid back.  Substitute health care, auto manufacturing, or unemployment support at the societal level and the logic is the same.  No matter how much a program appears to benefit people, it must be weighed against its costs.  But you knew that, right?

Apparently, our current administration did not.  Six months in, Obama’s lead economic advisors are starting to hem and haw about the need to raise taxes, even after campaign promises that “not one dime” of additional taxes will be levied against anyone earning under $250,000.

Some of us knew that to be a lie when it was spoken.  The rest have either figured it out since then or are busy manufacturing some lame justification involving the word “crisis.”  Of course, it is not news to point out that politicians lie.  The important thing is figuring out where this lie leads us.

After last year’s collapse led us to the brink of finding out the truth–that our money is fake and that we are sitting on top of a financial time bomb, Obama has diverted our attention.  By pumping trillions of fake or “borrowed” dollars into the economy, Americans have been duped into thinking the recession is over.  The newspapers have dutifully obliged by failing to report anything but the upside.

As if that were not enough, Congress and Obama are cramming economy-crippling cap-and-trade legislation and health care “reform” down the American peoples’ throats.  Were it not for a few members of Congress who have not gone completely insane, we would have seen at least one of these foisted upon us before the Congressional break.

We are not that stupid, are we?  Some days I wonder.  If the current administration is allowed to continue its current course, we will have reset the timer on the bomb.  Problem is, we will have added more explosives in the meantime.  When it goes off, there will be absolutely nothing Obama or anyone else can do about it.

Fortunately, Americans as a whole still have left some remnants of their former spirit of freedom, independence, and common sense.  Members of Congress are headed home to throngs of protesters who recognize that our government actually has become a menace.  They will fail to listen at their own political peril.

About Terry Noel

I am an Associate Professor of Management and Quantitative Methods at Illinois State University. My specialty is entrepreneurship.
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4 Responses to Government’s Credit Binge

  1. Ann Shimel Oliver says:

    Once again, you have hit the nail on the head. Obama is the master of diverting America’s attention away from the real issues. I can’t help but believe that the “B3 Summit” was a device used to divert attention away from healthcare reform.


  2. Terry Noel says:

    Thanks, Ann. It makes me wonder what Obama really does have in mind for the long term. He cannot possibly think that all these expenditures will NOT result in an economic disaster. Or maybe he can.


  3. Caesonia says:

    I have been reading a lot of your blog posts, and while they appear to point to common sense – such as we should not outspend our budget, duh – I see little that digs into what has been going on, or a remote attempt at an alternative suggestion.

    For many years, I felt I was out of touch with my fellow Americans because I lived within my means, saved, and even took a lower and lower living standard because of the profligate spending of my fellow citizens. You see, I was raised by those who survived the Great Depression.

    Now, I feel unrewarded for my thrift. I lost 10 years of savings, though what is left I have used top get far better bargains on for major expenditures. I am being asked to bail out the very people who lowered by living standard and subsidize companies that were over-leveraged, or just plain stupid and greedy from banks to car companies to now the health insruance industry.

    Most of all, I feel unrewarded because the lesson hasn’t been learned. We are in denial and still wrapped up in ideological rubbish candy wrapped as clean thinking or common sense. The idea that deficits don’t matter and corporate bailout has been the rule since Reagan. I don’t think any one, Democrat, Republican, or Libertarian thought spending orgies were smart before then.

    Common sense says its time to stop doing what we have been doing. It didn’t work. The question is, what do we do? What are the solutions? THAT is common sense. No more focusing on ideology, its time for answers. Our government is a menace because it is run by ideologues left and right. That’s why the current health care reform isn’t reform at all.

    Let’s be the leaders and have solutions!!! :>))

    Thanks for your time.


    • Terry Noel says:

      You hit the nail on the head. The solution is for us to reclaim our creative energy and use it to our benefit. In my view, supplementing one’s income with a business can at least help. For one thing, it can bring in extra cash. For another, tax laws still allow numerous deductions for business. In general, you get to keep more of the income you bring in from your own business. Start by educating yourself on how to start a business. I offer an online course ( and there are numerous other sources, such as popular books.

      Your loss must have been tough. I feel for you. Unfortunately, the rules of prosperity that worked for your parents will not work now. Saving money only to have its value stripped away by inflation makes a former virtue a current vice. Robert Kiyosaki, author of Rich Dad Poor Dad, states the case bluntly when he says “savers are losers.” What is the solution? We all have to learn to make more money and invest it in solid assets. Paper assets like stocks, bonds, and mutual funds are only part of the total investment picture. Within the last year, we have learned how unstable they are. By adding business ownership into the picture, we become less dependent on our jobs. By investing in solid assets such as real estate (careful here–only certain kinds of real estate investment qualify), we can eventually earn our independence from jobs.

      I wish you luck in your journey. You are right, we can become the leaders and reclaim our country. First things first, though. Let’s all earn our financial independence and then show others how to do the same. When people realize they don’t need government nearly as much as they think they do, the stage will be set for a return to true freedom in this country.


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