This weekend Standard and Poor’s (S&P) downgraded the credit rating of our country from an AAA to an AA+. Then last night I read that a white house advisor blamed the tea party for the downgrade.
I’ve had it with politicians who are more focused on blaming the other guys than trying to fix the problems of our great nation! I have a hunch that I’m not alone.
From what I’ve observed, S&P warned us during the debt ceiling debate that we needed to reduce our deficit spending and start reducing the debt we have accumulated. The debt ceiling agreement did little immediately other than raise the debt ceiling, but did do two things later. We punted the issue from our elected officials to a “special” commission to figure things out later, and much of the advertised cuts are down the road where they may or may not actually happen.
After watching the NFL players and owners, with conflicting goals, find a workable solution that allowed the season to begin, I find the destructive antics being played by many politicians to be unbelievable.
Grange members in their personal lives and as members making decisions for their organization understand that we can’t spend more than we take in without risking our future. We understand that if you only have enough money to buy milk for your kids, you don’t buy pie instead. We understand that if you don’t have money to pay the credit card bill, you don’t use the card.
I don’t know what the repercussions of the downgrade will be, but I do know it is not going to make our situation better and it may make life harder for every American. Hearing the S&P is still warning that they may yet reduce our rating further and that other rating organizations are reviewing our status, should wake up the folks in Washington, D.C.
I wonder how many politicians are listening to us? Are we stupid to think that our elected officials should find ways to reduce spending and debt? No one thinks it will be easy, but these elected officials asked us for the opportunity to serve our country.
To each politician I say, the parties didn’t elect you, we did. If you think we’re stupid, we can fix that a year from November. At least we can balance a check book.
Showing posts with label Deficit. Show all posts
Showing posts with label Deficit. Show all posts
Monday, August 8, 2011
Monday, July 11, 2011
Debt Ceiling and the Deficit
Listening to the news, it would seem that it is time for the President, our Senators, and our Representatives to actually find some solutions on the debt ceiling based on what we regular Americans already know.
First, we are spending far more than we take in. A trillion dollar deficit increases our national debt. Since 2008 we have added 4 trillion dollars to our national debt. The only way to stop growing the debt is to reduce the deficit spending to zero. It doesn’t seem that this concept is all that hard to figure out, at least for those of us who live out of the infamous beltway.
Will reducing the federal spending hurt? Of course it will. Some federal employees may lose their jobs, some people living off the flow of money from the federal government will lose their income, and some companies will need to find new clients. It will be similar to what many of us around the country have experienced over the past several years.
The upside is that without the federal government spending every available dollar, the economy may begin to grow which would provide new jobs and opportunity.
Second, the debt ceiling is about spending. Congress has demonstrated their ability, over the past decades, to spend whatever amount is collected in taxes and more. We must start the process to only spend what we collect in taxes and fees (revenue). To continue increasing the limit on the federal credit card without a plan to halt the growth of the debt is foolish at best. At worst, it is destructive to every American’s future.
In our lives, if we leave large debts, they are paid out of our estates when we die. That means our family has a smaller inheritance. For the federal government that means the following generations are left with more bills than opportunities.
Third, if we want to actually solve this problem, Congress needs to do their job and pass a balanced budget. Then we need to live within our means, just as families across our nation already do. Discussions on raising revenue (tax and fee increases) and eliminating tax credits should be a part of the budget discussion, not a negotiating tactic in dealing with the debt ceiling.
Americans know what happens when your personal or corporate debt grows too large, we go bankrupt. Watching Greece, Ireland and other countries that have failed to keep spending under control should serve as a warning to us. I’d suggest that the approach that regular Americans take toward debt be followed by our government.
First, we are spending far more than we take in. A trillion dollar deficit increases our national debt. Since 2008 we have added 4 trillion dollars to our national debt. The only way to stop growing the debt is to reduce the deficit spending to zero. It doesn’t seem that this concept is all that hard to figure out, at least for those of us who live out of the infamous beltway.
Will reducing the federal spending hurt? Of course it will. Some federal employees may lose their jobs, some people living off the flow of money from the federal government will lose their income, and some companies will need to find new clients. It will be similar to what many of us around the country have experienced over the past several years.
The upside is that without the federal government spending every available dollar, the economy may begin to grow which would provide new jobs and opportunity.
Second, the debt ceiling is about spending. Congress has demonstrated their ability, over the past decades, to spend whatever amount is collected in taxes and more. We must start the process to only spend what we collect in taxes and fees (revenue). To continue increasing the limit on the federal credit card without a plan to halt the growth of the debt is foolish at best. At worst, it is destructive to every American’s future.
In our lives, if we leave large debts, they are paid out of our estates when we die. That means our family has a smaller inheritance. For the federal government that means the following generations are left with more bills than opportunities.
Third, if we want to actually solve this problem, Congress needs to do their job and pass a balanced budget. Then we need to live within our means, just as families across our nation already do. Discussions on raising revenue (tax and fee increases) and eliminating tax credits should be a part of the budget discussion, not a negotiating tactic in dealing with the debt ceiling.
Americans know what happens when your personal or corporate debt grows too large, we go bankrupt. Watching Greece, Ireland and other countries that have failed to keep spending under control should serve as a warning to us. I’d suggest that the approach that regular Americans take toward debt be followed by our government.
Saturday, April 2, 2011
Is Congress having trouble finding the holes in the belt?
Congressional efforts to pass a budget that reduces the deficit for 2011 – the fiscal year which ends September 30 – would be humorous if you and I were not on the hook for the out-of-control spending. After watching the last Congress fail to pass a budget and the current Congress continuing to fund our nation through short-term spending bills, the big question is if anyone is willing to act like a grown up.
The original 2011 budget was estimated to have a $1.27 trillion deficit. The Congressional Budget Office (CBO) now projects a deficit of close to 1,500,000,000,000 dollars. There are a whole lot of zeros in that number!
The House of Representatives is arguing to cut $61 billion and the president and Senate are proposing smaller cuts. It seems that our government doesn’t want to cut the budget too much, and every proposed cut or reduction has its vocal critics.
Using the CBO revised projection of a deficit of close of $1.5 trillion, we understand that every day since October 1 our national government spent a little over $4 billion more than we took in. That means the $61 billion in proposed cuts amounts to about 15 days of the deficit spending and that still leaves our government with the money we actually pay in taxes.
Few Americans haven’t tightened their own budgets in the past two years. Many of our families still have someone unemployed or only working part time. I think that this is a time to put partisan politics aside and make some hard and thoughtful choices. If we search for only programs that no one uses, we will never get the spending under control until it is far too late.
The 2008 budget had a deficit of $458.6 billion, which was a historic high. To argue that the current $1.5 trillion deficit – at about three times the 2008 high point – cannot be reduced by about 4 percent without devastating effects is absolutely ludicrous.
A growing national debt will have devastating effects on every American. I want every elected official to work to avoid the pending disaster that is not too far down the road. If you punt the issue down the field once again, I have a hunch that I will not be the only voter who remembers. I believe that the American voters will reward those who work to reduce the deficit with thoughtful choices, no matter how hard those choices are.
Just like millions of other Americans, I am working to reduce my personal debt and tightening my own belt, and we expect Congress to follow our example.
The original 2011 budget was estimated to have a $1.27 trillion deficit. The Congressional Budget Office (CBO) now projects a deficit of close to 1,500,000,000,000 dollars. There are a whole lot of zeros in that number!
The House of Representatives is arguing to cut $61 billion and the president and Senate are proposing smaller cuts. It seems that our government doesn’t want to cut the budget too much, and every proposed cut or reduction has its vocal critics.
Using the CBO revised projection of a deficit of close of $1.5 trillion, we understand that every day since October 1 our national government spent a little over $4 billion more than we took in. That means the $61 billion in proposed cuts amounts to about 15 days of the deficit spending and that still leaves our government with the money we actually pay in taxes.
Few Americans haven’t tightened their own budgets in the past two years. Many of our families still have someone unemployed or only working part time. I think that this is a time to put partisan politics aside and make some hard and thoughtful choices. If we search for only programs that no one uses, we will never get the spending under control until it is far too late.
The 2008 budget had a deficit of $458.6 billion, which was a historic high. To argue that the current $1.5 trillion deficit – at about three times the 2008 high point – cannot be reduced by about 4 percent without devastating effects is absolutely ludicrous.
A growing national debt will have devastating effects on every American. I want every elected official to work to avoid the pending disaster that is not too far down the road. If you punt the issue down the field once again, I have a hunch that I will not be the only voter who remembers. I believe that the American voters will reward those who work to reduce the deficit with thoughtful choices, no matter how hard those choices are.
Just like millions of other Americans, I am working to reduce my personal debt and tightening my own belt, and we expect Congress to follow our example.
Thursday, January 13, 2011
Spending More Than You Make
I’m beginning to wonder about either the sanity or intelligence of some of our politicians, at least in regards to financial matters. Our Federal Government is drowning in debt, at least 10 states are aware that bankruptcy is a possible option and what the heck is going through the minds of many of our elected officials?
Illinois raised taxes this week, a number of states have raised their taxes over the past two years and seem to be avoiding reductions in spending. On the other hand, a number of states have either already slashed spending or are proposing serious reductions in spending now.
I’ll admit that I’ve read a couple of books dealing with economics, that I’ve been managing my families finances with my wife for 30 years, and that in working in business and with a variety of non-profit groups I have a bit of experience dealing with money and budgets. Even though I’ve never dealt with billions of dollars, much less trillions, I think that I’ve learned some simple fundamentals.
Rule number one, don’t spend more than you make. I understand that you sometimes borrow money in order to purchase big ticket items, but you don’t borrow more than what you can comfortably make the principal and interest payments on. If your income goes down, you reduce spending, even if you have to give up something you like. If your income goes up, you set aside a bit for a raining day in the future before increasing spending.
Governor Martin O’Malley, MD said “This year I think all of us will come to appreciate just how important the recovery and reinvestment dollars were.” He was referring to more than 350 million from the federal stimulus that was used by Maryland to pay off its pension promises for the past two years.
To top off Maryland’s situation, their legislature is discussing raising taxes to deal with their deficit.
I think someone doesn’t understand not spending more than you make or not borrowing more than you can afford, at least in Maryland and a number of other states. When do elected officials begin to act like most Americans do when their income drops? What spending is critical, what is important, what is nice, and what is simple extravagance? Our families have to live with the realities of rule number one and make hard decisions, why do some elected officials not understanding this simple concept?
Illinois raised taxes this week, a number of states have raised their taxes over the past two years and seem to be avoiding reductions in spending. On the other hand, a number of states have either already slashed spending or are proposing serious reductions in spending now.
I’ll admit that I’ve read a couple of books dealing with economics, that I’ve been managing my families finances with my wife for 30 years, and that in working in business and with a variety of non-profit groups I have a bit of experience dealing with money and budgets. Even though I’ve never dealt with billions of dollars, much less trillions, I think that I’ve learned some simple fundamentals.
Rule number one, don’t spend more than you make. I understand that you sometimes borrow money in order to purchase big ticket items, but you don’t borrow more than what you can comfortably make the principal and interest payments on. If your income goes down, you reduce spending, even if you have to give up something you like. If your income goes up, you set aside a bit for a raining day in the future before increasing spending.
Governor Martin O’Malley, MD said “This year I think all of us will come to appreciate just how important the recovery and reinvestment dollars were.” He was referring to more than 350 million from the federal stimulus that was used by Maryland to pay off its pension promises for the past two years.
To top off Maryland’s situation, their legislature is discussing raising taxes to deal with their deficit.
I think someone doesn’t understand not spending more than you make or not borrowing more than you can afford, at least in Maryland and a number of other states. When do elected officials begin to act like most Americans do when their income drops? What spending is critical, what is important, what is nice, and what is simple extravagance? Our families have to live with the realities of rule number one and make hard decisions, why do some elected officials not understanding this simple concept?
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