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Spend budget money. Hand opens the tap with money. money flows.
Spend budget money. Hand opens the tap with money. money flows.
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Wealth & Poverty Review A Limitless Limit

Tim Scala
May 12, 2023
Inflation

The National debt now stands $32 trillion, a literally incomprehensible number. President Biden and Speaker McCarthy have yet to engage in the meaningless ritual referred to in Washington D.C. as Federal Budget Negotiations, necessary to reach a compromise enabling the nation to increase its debt ceiling.

Wouldn’t it be nice we could all raise our own debt ceilings every time we needed more money?

Imagine if the government had to conduct its finances under the same rules as us mere citizens!

(Telephone rings)

Loan officer: First Federal Deficit Bank. Loan Department. Ed Franklin speaking.

Treasury Secretary Janet Yellen: Good morning, Bob Simmons please.

Loan Officer: I’m sorry, but he’s out of town repossessing a pyramid. Can I help?

Yellen: Sure. I’m US Treasury Secretary, Janet Yellen. I just got a text from you that says we’re up to our credit limit. What gives?

Loan Officer: Just a second while I pull your file. Let’s see … it says here that you spent roughly $1.1 trillion dollars more than you took in last year, making the balance of your loan $31,702, 656,286,432.58 as of ten seconds ago. It is, as you know, a rapidly moving target. We actually tried to put this in a letter to you but, even when we rolled it up, we couldn’t fit it in a drapery rod box.

Look! Don’t take this the wrong way, but the credit guys have been on Simmons’ back ever since you were classified as the world’s largest debtor nation back in 1985, and frankly, they think you’re a tad overextended. When do you think you can start paying off some of the principal?

Yellen: The Principal? Get serious! Do you realize what you’re asking? Where would it come from? Cut spending? Raise taxes? Cut defense? Do you know what it costs just to change the oil on Biden’s corvette? Why don’t you try to get Congress to agree on something! See what that’s like, why don’t you?

Loan Officer: Well, nobody is saying it will be easy. Do you think it’s going to be easy to drag that pyramid six thousand miles?

Yellen: Well, whatever. Listen, the reason I’m bothering to respond to your ridiculous text is to get an increase in our limit because we already need more money.

Loan Officer: More money? How much more money?

Yellen: We’re thinking two or three big ones.

Loan Officer: What two or three billion more?

Yellen: Two or three billion? Are you kidding? No, I mean two or three trillion dollars. We couldn’t haul away half of those classified documents for two billion dollars.

Loan Officer: Well,assuming I could get it by the credit people, you would owe us more than $34 trillion.

Yellen: Look! Is there some kind of problem here? Every time we needed more money before, I would just call Bob and he would cut me a check.

Loan Officer: Look Madam Secretary! We’re not talking about a car loan here. We’re talking Carl Sagan numbers.

Yellen: Lighten up, Ed. This is the United States government you’re talking to, not some banana republic. If you need the money that badly, we’ll just turn up the printing presses and a fleet of trucks can be out there this afternoon. You’re not the only bank in town. We can get one of those crummy calendars from our insurance agents.

Loan Officer: What would you say to a co-signer?

Yellen: A co-signer? Who do you think would be able to pay you if we default? You guys are in up to your eyeballs here. Think about it Franklin! You guys are lucky to have us as a customer. Have a check ready Wednesday so I can get that guy McCarthy and his MAGA hat out of my office already. (Hangs up).

Tim Scala

Fellow, Center on Wealth & Poverty
Tim Scala’s experience in the international financial markets began in 1969 as a young foreign exchange trader for a British Merchant Bank at a time when the Breton Woods system was still functional. He was an active currency and fixed-income trader during the most chaotic and volatile periods in history. As a member of senior management for a large regional bank and a member of the bank’s ALCO Committee, helped construct, analyze, and execute the institution’s risk-management function. He has broad and deep experience as a Trader, a Manager, an Instructor and an Expert in trading rooms, courtrooms, and teaching venues for decades. He has a practitioner’s perspective of the major international events influencing global financial markets. Financial professionals from well over one hundred major financial institutions throughout the world have attended his seminars.