My debt ceiling just got raised this month. Much like in the U.S., it wasn’t easy to get it passed through the House, but it got through.
You see, unlike other families, we have a unique arrangement – some might call it dysfunctional. We can only spend more than a specific amount each month if we all agree to do so. And if we do agree to exceed the limit, then we all have to agree on how to cut back or make more money in the months ahead to make up for the deficit.
Now it probably wouldn’t be a big deal to forge an agreement between just my wife and me. We’re adults. We have similar priorities and understand the limitations of running a household. Sometimes exceeding the debt ceiling is necessary. We can’t just cut back on heat, for example, or we’ll freeze. Can’t cut too much more on food, or we’ll be malnourished.
The problem is our four-year-old. As much as I’ve been trying to teach this child about the basics of finance, she simply refuses to be governed by reason. Not only does she have an ignorance of the consequences of debt default, but she refuses to make any cuts! She has enough toys to fill up a single bedroom to the ceiling. But if I ask for just one toy to sell next month to make up for our budget shortfall, she gets all moody on me. She throws a tantrum!
This month we overspent our budget. It happens, particularly when vacations are involved. But you gotta pay the bills eventually.
So I told my 4-year-old the grim facts. As expected, she could’ve cared less. She said, “Oh… Can I watch Dora now?” No understanding whatsoever! So I pulled out all the stops. I told her that we can’t go out for ice-cream tonight because Daddy can’t borrow anymore. That bothered her a little, but only until I let her watch a little TV.
Knowing that my daughter would never agree to a reduction in “toy spending” to make up for our budget shortfall, my wife and I agreed, however reluctantly, to again cut back on discretionary spending. No more meat on Mondays.
The debt ceiling was lifted and another fiscal crisis was resolved. In a dysfunctional system, one might even say that sanity prevailed. Until next month comes around...
