The Balancing Act
In the last few installments of this fixing the economy series, I laid out the three pieces to solving a large part of the nation’s current (and potentially future) economic puzzle. Namely, balance the budget, pay down the debt, and save for future expenditures. Today I want to focus on the one that encompasses them all: balancing the budget.
Let’s take a typical family’s budget. You have a certain level of income. Spending that revenue begins with your necessities like food, clothing, shelter and taxes. Hopefully you can have some fun items like cable television (how else can you see my show?), vacations, and the like.
But you also have debt. A house is a big debt, but even popular financial author and debt-hater Dave Ramsey isn’t completely opposed to families borrowing for a home--as long as they budget to pay it off. And while I’d like to see you save for a car ahead of time, most people have a current debt for their current wheels. Many have credit card debt as well. All of the payments for these debts need to show up in the budget.
Then there are the future expenses: The next car, college for the kids, retirement for you, and any other goals you have. Planned savings programs should be established for these. After all, is it fair to dream with your spouse about an idyllic retirement if you aren’t saving near enough to afford it? Is it nice to tell your daughter that you’ll help her go to the college she’s worked so hard to qualify for, yet have less than the cost of her books saved by the time she signs up for classes? If you are promising yourself or another a future that requires money, saving for it needs to show up in your budget.
Just like a family, the country needs to have a budget that can handle current expenses, the debt burden of past expenses, and future planned expenses. And just like most families, the country has way too many current expenses, a larger debt burden than it should, and a whole lot more dreams for future spending than money saved to meet those goals.
So, just like a family, the government--not just our elected officials, but “we the people,” as well--needs to sit down and face the hard realities in front of us. We are going to have to cut our current spending down, we are going to have to pay down our debt, and we are going to have to give up some of the dreams we have for our future.
Balancing a budget for a family is not fun, which is why so few really try. Balancing it for a country is even harder as it affects more people and more opinions. It is much easier to point to someone else and say that they need to pay more in taxes or that their government sponsored program is the one that needs to be cut. But fun or not it needs to be done. And it needs to be done with intelligence.
This article was published under the title "Balancing Budget Calls for Hard Choices"
in the Wichita Falls Times Record News on August 29, 2010.
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