homepage logo

Shell Shocked: A household dilemma: Live on debt or balance the budget?

By Staff | Aug 20, 2019

Art Stevens

The deadline was nearing. It was 11:30 p.m. and a deal to avert shutting down the household hadn’t been voted on as yet.

Bob and Amy, husband and wife, were still bickering about how to resolve the budget stalemate. It wasn’t looking good.

It was budget crunch time again in the Smith household (real names have been changed to protect the innocent). The argument that had raged for the past two years continued to rage again and was close to shutting down the Smith household because no agreement had been reached on what the debt ceiling should be and what cost savings needed to be put into effect.

At issue was how much steak should be in the family diet for the next six months. Was buying tickets to see the Broadway show “Spiderman” consistent with frugal planning? And were four new red wine glasses truly vital to the proper functioning of the family? The debates were heated and were based purely on party lines.

At issue also were the new dental veneers Amy had ordered and the wedding dress she had committed to even though her daughter was only six years old. “You’re extravagant,” shouted Bob. “You’re a Scrooge,” retaliated Amy.

The neighbors were concerned. If the Adams family couldn’t reach a deal on a household budget for the next fiscal year then the neighbors’ household budgets could also be affected. If the budget crisis couldn’t be met by the midnight deadline then the Smith household would shut down and Bob wouldn’t be going to work the next day. If he didn’t go to work then he wouldn’t be in the car pool. If he wasn’t in the car pool then the neighbor whose turn it was to drive the car that week would be paying more for gas.

And if he were paying more for gas his kids wouldn’t get allowance money to go to the movies. And if the kids didn’t gets allowance money to go to the movies they would be staying home during that time period putting extra pressure on their mom who wouldn’t be able to knit the sweater she needed to raise extra money because she’d be looking after the kids.

And if she couldn’t sell the sweater to her next door neighbor who put in an order for it then that neighbor would have to buy a similar sweater at Macy’s but at a much higher price, thus infuriating her husband whose allegiance was already with Bob. So it was clear that what the Smiths did to avert a budget stalemate affected all the other neighbors, in fact, the entire country.

Watching the 2019 budget agreement come together six months after its deadline was like trying to read tea leaves in a hurricane. Bob was fiscally conservative and maintained that the household should be run on present income and no debt. He maintained that long term debt was accumulating and would have a deleterious effect on the children. He felt that the children’s future would be mortgaged, much like the one he had on the house.

Amy, on the other hand, felt that the economics of the household encouraged long term debt so that all basic programs would be preserved and not be victimized by lower household revenues. She said that dance, tennis and trombone lessons for the kids were vital to their wellbeing. And that her weekly massage therapy was vital to her mental health.

Bob said the household couldn’t afford these entitlements and that balancing the household budget and not accumulating long term debt was in their best interests. He continued to cite Keynesian economic principles.

Amy said that it was perfectly okay to absorb large credit card bills and pay them out piece meal. Bob said that if the household couldn’t afford a pay as you go system then it should shut down.

“Shut down?” Amy exclaimed. “Why should our lives be all about money? We’re living within our means as long as we have the opportunity to pay for things long term.”

Bob took a long sip of tea and said, “I want to live my life on the principles of the tea party. I want less intrusion into our household by outside forces and want to pay for things when they’re incurred. We will no longer live in debt and cause our children to suffer years down the road.”

Amy countered by saying: “I disagree. Were entitled to all the niceties of day to day living. I want things for myself and my family. We just need to raise our debt ceiling and borrow to pay for the things we want. I will not deprive our children of opportunities I didn’t have when I was their age. You’ll just have to find a way to bring more income into the house.”

And so the Smith family continued their debate about the household budget and their debt ceiling while millions of families throughout the country engaged in similar debates. The Smith household was a microcosm of what the federal government was agonizing over. Should we spend less and balance our budget? Or spend the same and raise our personal debt ceilings? Your call.