Real Life Arguments #3

Likening Congress to a family arguing that it can improve its credit rating by deciding not to pay its credit card bill, Fed Chairman Ben Bernanke said yesterday that raising the legal borrowing limit was not the same as authorizing new government spending. He is right, by definition, they are “not the same”. But he ignored that they are inextricably linked. Bernake used an analogy to family (which is a fine way to illustrate things) but he completely ignored (the fallacy of special pleading) referring to the obvious consequence to raising the debt limit by a credit card company to a family who has reached the limit and has increased its debt by 37% in its last 4 years. The question is, if the debt limit is raised, what is the likelihood that the family will go ahead and debt-spend its way to that limit also, unless there is some budget restraint and demonstration of fiscal responsibility?
Of course the debt company wants to have increased debt to those clients that the company thinks are pretty certain to repay. Credit companies are for-profit and exist by making money off of their clients’ debt. Many Politicians are for-power persons who attain more power when they get more money from the citizens, therefore more spending, more power. Remember, The U.S. debt to GDP ratio is the highest in history having gone up from 70% to 102% (a 31% increase) in just the last 4 years and the raw debt has gone from 10 billion to 16 billion (a 37% increase) in the same amount of time.