Rand Paul: “it has been said, and all too often ignored, if you live beyond your means, you will be forced to live beneath your…”

“it has been said, and all too often ignored, if you live beyond your means, you will be forced to live beneath your means. Living and consuming on borrowed money always end. Lenders, even in an age of inflation, have their limits. When living extravagantly, it seems the good times will continue forever, but when the bills come due and the debt, with interest, needs to be paid, the good times end. The fiction that the appreciating prices of houses and stocks and other assets serve as savings is always self-limited and ends with pain. Without a source of newly borrowed funds, once the value of stocks and houses depreciates, the individual comes to the realization that hard work and effort are required to produce sustained wealth. Working minimally is replaced with working maximally to survive, as well as to pay for the extravagance of previous years. The consequence is more work and a diminished standard of living. A nation that has lived beyond its means for a long period of time must go through a similar process. Once the national debt grows to an extreme proportion, as ours has, there is no possibility of it being paid off in the conventional sense. Default and liquidation are required, but sovereign states that enjoy the ruthless power to tax and create new money always resort to paying their pays by deliberately depreciating the currency. This makes it hard to identify the victims and the beneficiaries.”