I've long made a joke that credit cards are evil. But that's not true.
When a person who is responsible with their money uses a credit card
responsibly, credit cards are not evil at all. Try renting a car or
making a hotel reservation without a credit card. Credit cards also
offer a level of protection when you make purchases. For instance, if
you buy something online, and you're unhappy with it, or it's never
delivered to you, you have the option of disputing the charges on your
credit card. It can protect you from many of the possible dangers of
purchasing something from an unknown company.
The problem is that many of us do not use credit cards responsibly. When
my wife went back to school to finish her degree, we were making very
little money. We were basically living off student loans and credit
cards. By the time she got out of school, we had racked up thousands in
credit card debt. We were buried with it and finding it difficult to dig
our way out. We considered bankruptcy.
We went to a credit counseling service, chopped up our cards, and made
monthly payments until we were out of debt. It's a liberating feeling to
make that final payment on your credit cards. We haven't looked back.
We no longer use credit cards. If we can't afford it, we don't buy it.
We have learned the hard way that we're better off without credit cards.
It doesn't make them evil. It just means that we're not responsible
enough to use them responsibly. Because of our access to "money" on our
credit cards, we were spending more money than we were making. We were
running a budget deficit every year.
Does this remind you of our federal government at all?
Since the early 1960s, our federal government has run budget deficits
every year except 1998, 1999, 2000 and 2001. They spend more money every
year than they receive in tax revenues.
Many have brought up the idea of a balanced budget amendment. This would
force the federal government to balance their budget every year, and
eliminate budget deficits.
In theory, I disagree with this approach. But in reality, it needs to be considered.
Why? It's kind of like credit cards. In theory, credit cards are useful
and offer purchasing protections for consumers. But in reality, many
consumers use them to buy products they cannot afford.
In theory I oppose a balance budget amendment. In times like these when
our country is in a recession, or is coming out of a recession, tax
revenues to the federal government are down. A balanced budget amendment
would force the federal government to reduce services during a time we
need them the most.
But reality shows us a different picture. If the federal government ran
budget surpluses during the good times, we could trust them to make good
decisions and allow them to run budget deficits during the bad times.
The problem is that our government does NOT run budget surpluses, even
during the good times. They just continue to increase spending in good
times and bad.
They are not responsible with our money, and they need to chop up their
credit cards. It's time for a balanced budget amendment. It would be
good for our country, and ultimately, good for our economy.