Difference Between Your Debt and Government Debt

Pop Quiz: What is the difference between your credit/debt situation and the Government's credit/debt situation?



Your Credit/Debt:

• You have (3) universally accepted credit scores prepared by three national credit agencies.
• You have a credit maximum imposed by your various lending institutions based on your income and outstanding debt.
• You take on debt with the intent of paying back principal and interest within your life time.
• You can always file bankruptcy.
• Most people operate with a fiscal management policy learned from parents, life and hard knocks.
  

Government Credit/Debt:

• There's no credit score (per se) to rely on to measure Government creditworthiness. There is however, some measure of creditworthiness in evaluating total debt, current funded liabilities, projected unfunded liabilities and the price of gold to the value of the "legal tender" currency.
  
• Maximum credit is virtually unlimited, but is throttled by Treasury investors willing to take and hold Treasury Securities.
  
• Unlike you, the Government can print money for almost nothing and issue it for full face value against outstanding debts. This devalues the dollar and is basically stealing the wealth of its citizens.
  
• Most debt is not planned for repayment within the current term (now life time) of most politicians. That's why Senate Appropriations Bills spend without concern for the consequences of the long term debt impact.
  
• There is no such thing as bankruptcy when you can print the money you need to continue to operate.
  
• Fiscal policy is whatever you think the policy should be at the time.
  
• You can always go to the IMF for assistance in securing more debt.
  
• By increasing or decreasing your financial or political leverage, you can change the actions of others who hold your debt...and/or desire objectives from you.
  
• You can always increase your income without asking the people who end up paying for it to agree.