“Mom, do we really have an enormous debt?” My 10-year-old leaned forward from the back seat of the car.

I was driving the kids to my favorite dentist’s office an hour and 20 minutes away and happened to have the radio tuned in to a local talk show, and the topic of the hour was on our national debt.

“Yes. We do” Me.

“But, I thought you said that we are a very wealthy country.” kid.

“Yes. We are.” me

“How can we have enormous debt and still be wealthy?” kid.

I thought the kids were busy in the back seat chatting and playing with their Nintendo DS, forgetting that my 10-year-old has a sharp ear, with an incessant curiosity. Luckily, I am blessed with the ability to answer my children’s big difficult questions quickly with simple, lighthearted, and sensible answers.

“A person can not be in debt and still be wealthy. A country can be both. Our government is poor. Our people are rich.” me.

“Why is our government poor?” kid

“They spend more money than they take in, so they go borrow more and more money from other countries.” me

Uncle Sam is Broke

“Why?!” kid

“Government spends tax payers’ money. It is very easy to spend other people’s money.” me.

Then I decided to play fair and add, “But the government does spend its money to help the people too. They build schools, roads, have policeman, fireman, and even give money and food to help the poor.” me

“How are the people rich?” kid

“We are rich compared to people from most other countries. Even our poor people are “rich” compared to many people of other countries. Only in America, poor people can have heat, AC, cable TV, video games, car…our poor people can even grow fat. The poor people from poor countries are all skinny, because they are starving.” me.

“We borrow a lot of money from the Chinese government these days.” I continued, “China is kind of the opposite of us. Their government is very rich, but the vast majority of their people are actually poor.”

No more questions came from the back, but that didn’t stop me from ranting on, “And if the Chinese government starts to spend their money to help their poor people, they will not be rich for very long, because China has a lot more poor people.”

“Can we listen to songs now?” 10-year-old.

“Sure. You don’t need to worry about our national debt right now…It will deal with you when you grow up.” I pushed a button and changed the radio station.

A previous related post: Explaining Headline News to Kids

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