A few years ago I was treasurer of my church. We had been in a financial bind for several years and had a large mortgage that was difficult to service. We had to use every nickel carefully.
Our church received donations for things other than the general fund, like missions, youth, memorials and others. Unfortunately in order to keep the mortgage current and expenses paid we had to “borrow” from those special funds in order to keep going. Our plan worked and eventually we received some large bequests that made us solvent. Each time we alerted the congregation that we were in trouble more money came in from or members who are very generous people but incapable of curing the problem permanently.
The problem was when we used the special funds for operations the folks who had given the money for special purposes were miffed, and rightly so. I think they understood but some groups began keeping separate checking accounts to control their money and be sure they had it when they wanted to do something with it according to their mission.
Our situation was very similar to the US government’s situation, but much smaller and easier to manage. The government does the same thing; uses our money for things other than what we think it was designated to be used for. Social security and Medicare are two big examples of this. Much of that money has been “loaned” to the other areas of government to cover operating expenses, like my church, because they have to in order to keep going. Banks also lend a lot of money to the government too, I hope those are good loans, we don’t need any more bank failures; that hurts all of us. This is not a party issue, both parties have done this for years.
How will the government get integrity into these special funds? My church did it by containing costs as much as possible and got whole with a large bequest. I don’t think that will happen in government as I see no windfalls or cost containment measures that will bail us out. I do think if the government would go into an austerity mode like we did that many people would be willing to pay more to whittle down the debt, but don’t see that happening in this environment in either party.
I’m not too worried about China holding our debt; it is small compared to the debt we hold. I am worried about the people here that could be affected by an insolvent government. Like my church I think we all want our money used for the purpose we pay it for. Otherwise it is similar to saving for a vacation and using the money for rent!