The New Dawn (Part 1)

I would like to start with a heavy dose of full disclosure.  Beforehand, I should probably say that this grunt is going to be one involving politics, economics, and how they’ve incestuously intermarried.

I used to be a die-hard democrat and uber liberal.  It’s how my parents were, and I followed in their foot steps.  Flash forward to my now burgeoning self-awareness and my own studies on economics, social shifts, and politics.  I’m more of a moderationist now.  Left is left of center, right is right of center.  We need to be a centered, focused nation.

One of my friends is quick to point out that as a nation, we spend more than we make.  Thus, we charge the leftovers.  We pay the interest, not the principal, to stay in ‘good’ standing.  If you are I were to do what the country does, well, it’s impossible.  The country is asking to extended their credit limit from their credit card company, and has done so many times in the past.

You have probably figured out how insanely stupid this is as a business practice (as the Government is the largest employer, spender, recruiter, let’s treat it as such).  From a household perspective, you have three options.

A) You begin spending less than you’re bringing in.  This allows you to stabilize your debt, and begin paying down your bills.  We need to do this, as our level of debt is not sustainable and partially the cause of such a weak dollar.  My wife and I have had to do this after I lost my job.  It wasn’t easy to tighten the proverbial belt, give up in part the lavish (from our perspective) life style we have lived.  Thrift shop and buy bulk foods, and focus on buying more durable products where at all possible.  The republicans are happy to cut spending (except military spending apparently, which I’d like to say is 1.4 trillion for the 11-12 calender year).  I’m ambivalent on budget cutting.  I can see where somethings could be cut (we need to build more sustainable and durable infrastructure rather than the crap the Wildish company makes).

B) You make more money.  We all wish we could just say this and have it magically happen (yes I do understand that positive self motivation has positive results on your career/job/etc).  The Government could raise taxes to exceed what their spending, covering their liabilities and still paying down the debt.  They could also save money for a rainy day (Social Security was not meant to be this fund).  Most people don’t want to raise taxes, and I get that–it’s a hard sell.  Yes, I’m taking more of your money.  There is the argument that the tax system is currently disproportionate, and I don’t want to belabor that point.  But I will say this–more money in the hands of 99.5% of the country makes more sense than more money for .5%.

C)  The last option is a combination of the two.  We raise some taxes, and cut spending.   This is perhaps just as hard a sell as raising taxes in general.  Who’s getting taxed? The rich, the poor, corporations?  (I would like to point out the example that GE netted 14 billion, and managed to get a tax kicker of 2 billion.  Sign ME up for that!).  What programs get cut? How much, etc.

The end result needs to be that we make a sustainable budget.  And not just ‘hey, look, the books are zeroed’ but paying down the debt.  This would do wonders to the global market place.  People would see the US managing fiances how they should be, debt would DECREASE, and the dollar would hopefully start to recover.

In my next part of this series I will discuss finances on a more personal level, what each of us needs to do (and demand) for the this country to turn around and bail itself out.