President Obama’s Budget Defense
President Obama is a charismatic politician who is able to deliver a speech with the best of them. His oral deliveries are well written, well timed and delivered with superb inflection and supporting gestures. He is somber when he should be, and enthusiastic when it’s called for. Unarguably, he is a great speaker.
Recently, while defending his unprecedented $3.55 trillion (with a ‘t’) budget, President Obama said “And that kind of dishonest accounting is not how you run your family budgets at home; it’s not how your government should run its budgets, either,”. I have a problem with President Obama making this statement.
Granted, financial management was not my college major. But I’ve been managing the family money, along with my wife, for decades. Our formula is pretty simple, and seems to work just fine. Here’s how our family budget works…
First, we figure out how much money we’ll have come in during the month. This is our combined incomes.
Second, we calculate the expenses that must be paid in the month – the necessary expenses. This includes mortgage, insurance, car payments – the things we simply must pay no matter what.
Third, we calculate the yearend expenses we know we’ll have to pay. This includes things like some insurance, taxes, car registration, etc. We divide this number by 12 to ascertain how much we’ll have to set aside each month in order to be able to make our yearend payments. This number becomes a necessary monthly expense.
Forth, we subtract the monthly expenses from the monthly income. Whatever is left over we decide what to do with. Some may go to savings, some to new shoes, maybe a DVD or something else. It depends on the month and the agreed upon needs, which are prioritized carefully.
If something happens to upset the budget, such as gas prices going through the roof, food prices going up, the car breaking down, and so forth, we adjust. We do without some foods, we don’t drive as much, new shoes wait, whatever is needed to stay within our means.
Sometimes the budget doesn’t work out. Something happens that increases the need to spend money. It NEVER happens that our budget doesn’t work because we got too much money in during one month. Examples of things that upset the budget are: my glasses got broken and I needed a new pair – $300. The transmission seal on the car ruptured and needed to be replaced – $900. When things like this happen, we give other things up and invade our diminishing savings.
We really have no way of suddenly increasing our income. Our income budget number stays pretty consistent. Sometimes there’s a small cash birthday gift from a family member, or a small bit of overtime, or we sell something. Otherwise, it hovers close to the same number each month.
The federal government’s budget is, quite obviously, nothing at all like the family budget – as President Obama implied that it should be.
The federal government decides what it wants and then tells the people to give them that much money. That’s backwards. Then, if there are more expenses than income, they ask for (demand) more money. And when staring down the barrel of a $3.55 trillion budget, it becomes obvious that nobody in the government is going to give anything up in order to make ends meet.
This is another reason that I am so offended when I am told to tighten my belt and get ready to make sacrifices for the good of the country. My belt is already so tight that my belly button is touching my spine.
I’d like to see wasteful government spending end. I’d like to see the government balance its budget. I’d like to see the end of pork projects. I’d like to see the end of politically rivalry and party fighting – and start to see a solid group of representatives serving the people who elected them. I’d like to see a budget arrived at reasonably. But as a friend of mine tells me – I likely have a better chance of being killed by a rabid unicorn than seeing any of those things happen.
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