We all like to spend money. Unfortunately most of us don’t have as much money as we’d like to spend. This isn’t merely true for individuals. Nations can spend too much money as well.
Greece has decided that it can’t handle the austerity measures necessary to put it on the path to financial stability. They’ve elected a new leftist government that’s got back to the serious business of spending money they don’t have. The Greeks can breathe easily again. Life is back to normal.
Sometimes life imitates art.
I’ve been reading Anthony Trollope’s Doctor Thorne lately. In the novel, the local squire, Mr. Gresham, has some financial difficulties. He’s got an immense income of £14,000 a year, but he’s got even more immense debts. He owes £80,000, and he’s just had to borrow another £10,000. Trollope describes Mr. Gresham’s reaction to the new loan this way.
Mr Gresham, feeling that difficulty was tided over for a time, stretched himself on his easy-chair as though he were quite comfortable;—one may say almost elated.
How frequent it is that men on their road to ruin feel elation such as this! A man signs away a moiety of his substance; nay, that were nothing;—but a moiety of the substance of his children; he puts his pen to the paper that ruins him and them; but in doing so he frees himself from a score of immediate little pestering, stinging troubles: and, therefore, feels as though fortune had been almost kind to him.
The Greeks cheering at the defeat of austerity feel the elation of Mr. Gresham.
But let’s not pretend like it’s merely other people who are Mr. Gresham. It’s us too.
The federal government will collect an immense fortune of $3.3 trillion dollars this year. Unfortunately it owes an even more immense fortune of $18 trillion. Trollope expects his readers to be shocked by Mr. Gresham’s debts, and he expects them to despise his cavalier attitude toward his financial difficulties. America’s income to debt ratio isn’t so different from Mr. Gresham’s.
Just like Mr. Gresham, we pretend to worry about the debts. But just like Mr. Gresham, we, as a nation, keep spending more money than we make. Just like Mr. Gresham we act like we’re the last generation, and we don’t concern ourselves with the mess we plan to leave our children. Things will turn around. Right?
I wish Anthony Trollope could write us a happy ending, but I’m afraid we’re on our own.