Imagine that you have about $35,000 in available credit.  You’ve taken a Dave Ramsey course and have reduced your debt to under $10,000.  You give yourself some room to maneuver, imposing on yourself a $15,000 limit because you don’t want to get yourself in trouble again as you try to bring that number down.

But then you lose your job, and your spouse’s income isn’t enough to live on.  And then your car dies and you need to spend a bunch on a new transmission.  Oh, and your health insurance skyrockets, because, well, that’s what it does now.  Before you know it, you are sitting at $14,800 in debt and August’s rent is due, and there isn’t enough in the bank to cover it.

Do you refuse to pay rent because your self-imposed credit limit is sacrosanct?

Do you skip paying your credit cards or utilities because you “hate the man”?

Do you go to the store and refuse to pay sales tax because you believe it is unconstitutional and hey, you’ve got to save the money somewhere?

Or do you break your own rule, going over the $15,000?

The debt limit is an arbitrary rule that doesn’t effect in any way how we spend our money (remember, in a democracy we are the government, after all), but only cuts you after you have spent it and before the payment is due.  It is a lame attempt to fix the system after it is actually too late.  So is the Balanced Budget Amendment.  Neither of these deals with the hard issues of the day, obsessing instead over any debt at all.

Remember what started the problem in my story?  Lost revenue, due to a lost job.  Half of our debt problem is due to lost revenue due to people losing their jobs.  Get people more jobs, and this “crisis” completely changes.

[NOTE: Most attempts to compare our federal budget to a personal budget are wrong by oversimplifying the problem and obscuring the real conditions behind a two-column income/expenditures balance sheet.  I’ve written about this in the past.  Here, I’ve tried to use that same idea of the personal while maintaining the complexity of the debt limit decision rather than suggest that it is representative of the economy as a whole.  Almost the entire discussion in Washington has pretended as if the debt limit is actually the credit line itself and that these are decisions we are making today about new shoes that we can’t really afford.  In truth, these are decisions we made months ago to buy ramen noodles for the starving.  Attempts to paint this as anything else are done for political and ideological reasons, rather than sound fiscal policy or for the well fare of any persons: the highest priorities of most Americans.]