DEBT AND A DEFICIT OF WISDOM

"A billion here, a billion there, sooner or later it adds up to real money." Everett Dirksen (4 Jan 1896 - 7 Sep 1969), former US senator

- RICHARD J GRANT

IT IS not a fairy tale that in the old days' debt was treated with greater caution than has become the practice in more recent times. It is not that the wisdom of Solomon has been lost; rather, it has become easier to rationalise it away in some segments of our society.

As they grow older, most individuals, especially those who take on family responsibilities-learn the importance of living within a budget, and of treating liabilities with caution.

Debt and the struggle to make ends meet have always been a problem for some families, and will continue to plague us to the extent that financial prudence must be re-learned in each succeeding generation.

Such difficulties become widespread in the face of ill-advised government policies and economic downturns. No one is unaffected.

Families are regularly faced with the stark realities of the marketplace, and of life in general. They receive daily invitations to re-learn lessons of the old wisdom-but over the last century, the opposite has occurred for governments.

Throughout the middle of the twentieth century, there arose the belief that governments were not faced with the same financial constraints as families.

Not only were governments seen increasingly as eternal beings, but the debts taken on by governments were seen as less onerous than those borne by families by virtue of the belief that when governments borrow, we merely "owe it to ourselves". Neither of these beliefs is correct; nor are they benign.