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Unless you are an eighteen year old single college student, deriving your current income from inherited wealth or the lotto, with a great deal of potential to increase your income, or some other equally unlikely situation, then you're in trouble with a debt of this size. No bank in the world is going to give you a mortgage to cover this amount of unsecured credit, especially if what you claim to need keeps increasing..
Finding ourselves in debt like this, the great majority of us would be seriously thinking about bankruptcy. Without a plan to pay this off, and without a way to secure a heavy mortgage, bankruptcy would be staring us in the face. You and I would first of all admit this, and then we would take every step we could to avoid it.
The very first thing we would do would be to stop spending more money than we make. Tear up the credit cards. In fact, if we went for financial advice the first thing any worthwhile consultant would do for us would be to cut up our credit cards and close off our borrowing or overspending. There would be no hesitation about this. It would not take 5, 6, 7 or 10 years to stop spending more than we make. (Try telling your credit card company that you're going to run a "deficit" this year and not pay anything against principal.)
We would also try to increase our income anywhere we could. This would include asking the boss for a raise or, if you own your own business, raising prices as far as possible while remaining competitive. It could even mean a second job or putting the kids to work. We might even try illegal activities like smuggling, selling drugs, becoming cat burglars, robbing banks or some other nefarious activity.
The government has fees and taxes as its only legal form of income. It can raise its own income any time it wants and particularly if it need not worry about voter reaction. Government also has the power to engage in and excuse itself from or cover-up activities of the latter sort above.Most of us would then cut back on all unnecessary luxuries like vacations, second cars, expensive cars, boats, private schools, big meals, club memberships, parties, eating out, new clothes, and so forth. We would try to "make do" with basic necessities.
Do you see any evidence whatsoever of the government doing this?Next, and in order to avoid bankruptcy while still paying our bills, most of us would begin selling off our assets. This is never an easy thing to do but if you don't you're liable to lose them anyway.
How about selling the U.S. Virgin Islands, Puerto Rico, Guam and the rest of the Marianas, American Samoa or other parts of the empire ?If that didn't bring in enough money, then we could turn to the last to join the company or union. Isn't that one of the ways they cut people at the factory? The last people hired are the first people fired.
Let's sell Hawaii and Alaska. Maybe we can keep the mineral rights.If we still didn't raise enough money, we would then look inside our homes to figure out what we could do without and still survive. This can get really nasty and include everything but the children. Even the expense of pet food and pet care might be cut or removed entirely, along with plans to sell the furniture, house, and move into a furnished apartment.
If none of the above got us out of the hole, we would then, at the very least and before declaring bankruptcy, try to reach some sensible plan with our creditors.
Do you think any of the little old ladies holding Treasury paper would settle for a piece of beach in St. Thomas, St. John's, or St. Croix?