I hear a lot of people asking why the federal government can't run it's budget like a family runs their budget. It sounds like a good argument on the surface, but comparing government finances to family finances is like comparing apples to oranges. First of all, the government has the ability to tax to create additional revenue, families can't tax their neighbors when they need to fix the roof. Whereas, a government can tax its neighbors (the people) to fix things like dams and roads. Families don't to have build roads and pay for the upkeep of them.
Families don't have to pay the lion's share of cleaning up a state after a hurricane or other natural disaster, as the federal government must. Families also don't have to pay for a standing army. Luckily for families, they pay a tax to the federal government to protect them with an army. The price for such an army doesn't bankrupt a family because it's defrayed by millions of other families chipping in.
The federal government is the issuer of our currency. Its IOUs are always accepted in payment. I wish my IOUs were so desirable. I don’t know any household that is able to spend by issuing currency. OK, some counterfeiters try, but they go to jail.
The family vs. government argument says that families have to balance their budgets and can't run a deficit. Well, what about a mortgage? How many families have a mortgage despite balancing their checkbooks? That's carrying debt like the government does!! Or how about credit cards for medical emergenices? That's all the government is doing when it prints money in periods of crisis such during a Great Depression or natural disaster. I'm not saying that we don't need to pay down our debt, but government is a unique entity and not like a basic family structure and budget. It's not that simple.
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