Common Sense: Keeping the Slate Clean

Did you know that most people who take out debt consolidation loans invariably end up with more debt?

According to the Consumer Credit Union, three out of four folks who take out such loans to pay off their bills, only end up with more bills.

I'm not surprised. You take out a big home equity loan at a low interest rate, to pay off a bunch of credit card bills at a lot higher rates. Now your credit card balances are wiped clean and are ripe for spending all over again. And that's the problem. People start spending all over again. It's human nature and in this country, almost an American birthright.

Our government is no different. In fact, it is worse.  Spending on pork barrel projects is running at a record clip.  As USA Today reports, in the House of Representatives alone, spending increases are running ten times what the president has proposed.

Thankfully, most of those projects will fall by the way side. But regretfully, many will not. And all because many in Washington — Democrats and Republicans alike — are feeling cocky. Borrowing costs are low. Surpluses are high. Everyone wants something and everyone is getting something.

My issue isn't with the tax cut, which I think we all deserve. My issue is with the reckless spending that I think we do not deserve.

Contrary to popular belief, Ronald Reagan's big tax cuts didn't cause those deficits 20 years ago — revenues actually soared.  No, it was spending that created the deficits. The more we took in, the more we took out.

Personally, I like the idea of forcing the government to do with less. It's the same advice I give to homeowners who refinance to pay off bills: rip up those credit cards and avoid the temptation.

After all, just because the slate is wiped clean, doesn't mean you can dirty it up all over again.

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