***Warning, this is my rant on the U.S. budget crisis. It is only my personal opinion***
My son was recently laid off for a couple of weeks during the budget crisis and I need a place to vent. Since this is my blog – I guess I can do it here. If you don’t care, don’t read it – I won’t be offended. If you disagree, that’s OK too. Leave a comment below. I will read it.
My dad ran more than one very large business and was responsible for the bottom line – income vs expenses. His dad (my grandfather) grew up during the Great Depression, took over the family farm as a boy when his dad (my great-grandfather) passed away. Both of them have a lot of practical wisdom about money that came from experience. I know that for a fact because my dad used that practical common sense to successfully run a large national manufacturing company in the 1960s and 70s. He also had experience running two other companies (one an international company) in the 80s and 90s. One day my dad taught me a principle about money that he said he had learned from my grandfather, “You can’t spend more than you make forever.” Now that I have two adult children of my own and seen them off to college, I believe more firmly than ever that if my kids understand simple principles like this they will have less pain in their lives.
Recently my country’s government shut down because of a crisis. Since that time I have seen some numbers floating around the internet in various forms. They are a simplification of the actual budget numbers that congress worked with in 2011 when the national debt was 14 trillion dollars. Now in 2013 we are 17 trillion dollars in debt and going the wrong way fast! These numbers are going viral because they illustrate the simple point that my grandfather taught my dad. Apparently congress has forgotten this very simple principle. Here are the numbers (the citation is below if you want to read the article from 2011).
U.S. Tax revenue: $2,170,000,000,000
Federal budget: $3,820,000,000,000
New debt: $ 1,650,000,000,000
National debt: $14,271,000,000,000
Recent [April] budget cut: $ 38,500,000,000
NOW: Remove 8 zeros and it could represent an out of control family budget)
Annual family income: $21,700
Money the family spent: $38,200
New debt on the credit card: $16,500
Outstanding balance on the credit card: $142,710
Budget cuts: $385
These numbers are powerful because they represent how far the U.S. government has strayed from simple budgeting principles. When I read them all I could say was, “Wow.”
BUT YOU SAY THE GOVERNMENT IS DIFFERENT…
Some articles have come out that attempt to point out the differences between the federal budget and my family budget. They basically boil down to things like this; the government can print money, the government can borrow for less interest, the government is more complicated. These are all valid point, but the principle remains the same. If we keep borrowing more than we make (and taxes are the only income of our government) something is going to break eventually. Yes, I agree that the U.S. government can carry more debt than I can and still survive. Maybe they can even carry a much bigger *percentage* of debt, but at some point the principle is going to come into effect – “you can’t spend more than you make forever.”
WHAT I WISH OUR POLITICAL LEADERS COULD DISCUSS (WITH CIVILITY)
The other problem I see with the many articles that have been written about why the government budget is different that my family budget is that none of them talk about the actual numbers. Someone is going to have to start talking about these numbers or they are not going to get fixed. Yes, it is boring and tedious work. No, it is never exciting to trim a budget. But forget all the Liberal vs Conservative politics and don’t let yourself be taken in by hate-mongering. Fact is, we are in 17 trillion dollars of debt and we need to discuss how to reduce that before the whole country goes bankrupt. Raise taxes? Sure, but what percentage of each person’s income should go to the government? Let’s talk about that and raise taxes if necessary. Close loopholes and simplify to reduce waste and cheating? You bet! Let’s simplify the system and talk about making it fair. Cut spending? If we don’t cut spending soon I am pretty sure that reality is going to kick in. The principle that my grandfather learned in the Great Depression is true and I don’t think there is any way to print enough money or raises taxes high enough to get around it. “You can’t spend more than you make forever.”
If I’m wrong about this, no harm done. Things will be fine. If I am right things will be OK anyway. I know that God will still bless those who trust in Him. But I think we will have less pain if we remember my grandfather’s simple principle about money.
Cites from around the internet: