A family earns an after-tax income of $51k. It spends $60.5k a year, by borrowing a little from credit card, some years taking out a car loan, and some years taking money from a home equity loan. Their mortgage plus home equity loan total $300k.

The analogy is a little flawed too because tax revenue isn't the same as "income". If we took total GDP as income, the numbers would start to look like a very average household. This is obviously not desirable.

This is not a good scenario, but many people operate like this.

Actually, I bet many families operate like this, which is not a good thing at all. In that way, politicians are representing their constituents. I have no idea how to bring back financial responsibility, but I think if society's general standards were more risk-averse our politicians would respond with more risk-averse fiscal policy.