More and more American families these days are learning to live within their means. They’re making trade offs about what they want, what they need, and what they can afford. They’re trying, during these hard times, to make their dollar stretch as far as possible. You’ll notice that what they aren’t doing, or at least not in great multitudes, is borrowing against their future so as to maintain their lifestyles. Sure, the draw to live as one has become accustomed is strong, and likewise, the ability to buy on credit is still a possibility. Were there no repercussions, were it simply a case of someone saying, “here take this, no strings attached,” we wouldn’t need to make sacrifices so that we can live within our means. However, when we know that there will be repercussions for our spending, that the credit card bill will come or that the bank will want their money back, we also know that we are going to have to do more with less.
Note, this is not a post about family budgets, but a post about national budgets. America, like America’s households, needs to learn to get more done on less money. Just as with those households, it is easy for the country to buy on credit, on the assumption that we can repay at some later date… far too easy in fact. Very little will stand in the way of our nation going deeper into debt, but just as with a normal household, someone has to eventually pay the bill. That money is not given to us—it comes with repercussions. Our President seems to be operating in the same mode as his predecessor: putting our nation into deeper and deeper debt so as to pay for all the projects that he wants to start or maintain. Congress raised the federal deficit cap in February of 09, they raised it again this month, and are poised to raise it again next month as part of a larger economic bill, currently before the Senate. Simply raising the amount of debt the federal government allows itself to accrue is easy enough to do.
It is far more difficult to do what American families are now doing, which is to make the budget stretch, to prioritize spending, and to make, ultimately, tough decisions about what stays, what goes, and what changes need to be made to make the system work with the amount of cash we now have. President Obama plans to raise taxes to pay for his system, but even raising taxes is easy compared to the obvious difficulties of telling the government and the American people that we are going to have to make changes and to tighten our belts if we want to come out of this recession ahead of the game. Part of the economic bill currently before Senate is a Pay-As-You-go option which will force Congress to cut spending in one area to increase it in another. However, the bill is not yet law, so it remains to be seen what it does to actually curb the existing levels of spending.
Real change is going to have to come from instigating some unpopular policies. If we think public health care is a priority for our nation, then the American rule governing lawsuits is going to have to go, patients are going to have to be made responsible for finding cost competitive health care , and medicare is going to have to get severely overhauled because, as it stands right now, it’s like having a medical credit card with the bills paid by the State. We can have public health care, but making it fit into the nation’s budget means that the government is going to have to make some changes, tighten its belt, and live within its means. The same is true of government spending in general. If President Obama wants to fund his numerous projects then charge the various federal and state agencies to trim the fat. The excesses of the government are significant. Set a goal to cut a reasonable amount of waste and not some token number that fails to make a real difference in the budget.
The President needs to look to the American family as his guide. We’d all like new houses, new cars, vacations in far away places, etc., but we’ve had to decide what is important to us, and figure out how to make our money work to pay for those things. Perhaps we give up on the vacation far away for a respite closer to home. Perhaps we let our car or our computer last a year or two longer before replacing it. Maybe we eat out less. We look for places where we can spend less, and try to identify expenses we can cut out altogether. What we don’t do is keep living as if we had the same opportunities to make money as ten years ago, and take the difference out in debt.