As a boy, I had a friend named William whom I did a lot with. It wasn't always fun for me, though, because William--being over a year older than me and much more forceful in personality--seemed to always get his way. And it wasn't just that we always did what he wanted to do: he seemed to come out on top in whatever game we played.Take Risk, for instance. No matter how I rolled the dice, I never won a game. I'd put 26 armies on the border of my continent, only to have him mass 56 armies against me. Then there was Monopoly. How he always ended up with 2 hotels on both Broadway and Park Place I could never figure out--nor could I avoid the inevitable landing on one or the other.
Since our Monopoly games tended to end as soon as this happened, William came up with an ingenious way to keep going: A Credit Line from the Bank. All I had to do was scribble "IOU $1200" on a piece of paper and put it in the bank (which didn't usually have enough cash on hand to handle the transaction otherwise). William would then add the credit slip to his pile of cash and the game would go on. This was great! But those two hotels were still on each of the dark blue properties, and it was only a matter of time before I landed on them again. Around about the time I hit $18,000 in debt, I realized that I was only postponing the inevitable. I could continue to borrow imaginary money forever, but I could never win against William. I finally conceded the game--relieved that my debt, huge as it was, didn't really exist.
This is exactly the situation that the US Congress faces this week. Seventy-eight times in the past fifty-one years, they have signed off on yet another IOU and slipped it in the bank, only to forestall the inevitable default that comes from continuing to live beyond their means. Yet they keep coming around to land on Park Place after the next election, necessitating another round of funny money to keep the whole system afloat. They can keep on raising the debt ceiling for a while, but unlike my friend William, America's creditors aren't going to let the game go on forever. Sooner or later, they're going to call the game--and request payment in specie.
America's Day of Reckoning is coming--and the longer Congress puts off dealing with it, the more it's going to hurt when they finally do. UPDATE JUNE 2012 Well, it's just about time for another IOU, and we are even further away from achieving fiscal responsibility. Unlike my Monopoly games, however, this cannot continue forever: sooner or later will come a day of reckoning, as it has come to every other fiat money system the world has ever created. But there's another application to be made from my Monopoly madness. Were I an ardent evolutionist, I could have continued the game indefinitely, setting the board carefully aside each night and picking it back up the next morning--at least until summer vacation was over (it rained a lot that year and there wasn't much to do outside). Every time I rolled the dice, I could have devoutly repeated the mantra, "Given enough time, anything can happen," but the only change would be the depth of the hole into which I would have continued to sink.
