Taming the Beast

The latest session of Congress is getting into full swing and much is being said of wrestling the deficit into a more manageable figure. I don't know about you, but I just can't get my head around trillions of dollars. So let's get this down to a level more easily understood: the household budget. After all, each of us is a mini-government and the way we handle our financial challenges should be similar to Uncle Sam's.

A household budget enjoys the freedom of flexibility in that it is not necessarily formalized in writing. I don't itemize my monthly expenditures, but readily recognize whether I have available funds for a specific purchase. Regardless, month in and month out, we manage our cash flow. We do not run a balanced budget as most of us have a mortgage or other obligation that is paid down over time. We do not enjoy a huge cache of reserve funds to cover unexpected expenses, such as a new roof, but have avenues of credit that we would draw upon in the event they were needed. And, most importantly, we realize that this debt must be addressed in a timely manner. We limit our discretionary outlays until such time as that new roof, or whatever, is paid for.

In Washington and our state capitals, it seems that such hard choices are passed on to future administrations. This dearth of leadership has brought us to our current monetary shortfall. How else can one explain the fact that Social Security has gone largely unmodified over the decades? We live longer and rely on fewer to fund the system for an ever growing number of recipients. This is (and has been) unsustainable yet no political will has surfaced to alter the program. A combination of increases in retirement age and decreases in benefits seems unavoidable, but any representative contemplating re-election is loathe to support such a solution. The same mentality extends to other programs that are considered "third rails" and does nothing but deepen our financial hole. In the family, there is no fear of making the hard choice simply because there is no election. The bread-winners make priorities and act accordingly. If only politics was that simple.

We will hear much about a balanced budget amendment. Don't buy into that, either, as it is nothing but smoke and mirrors. New York City and other communities throughout the country have blown through their snow removal budget for the year. A balanced budget amendment would dictate that no more snow removal would occur as the funds were no  longer available. See what I mean? The problem lies not in over-spending to cover unplanned events, but in the resistance to making up the shortfall within the next budget.

Some areas of a budget exceed their allotted amount while others have a surplus at the end of the fiscal cycle. Theoretically, of course, because every agency seeks to spend their funds for fear that, if they don't, they'll get less next year. Yet another example of how the system encourages continued expansion and abuse.

We read about state budgets in similar stress (only four states have no deficit for 2010). Many governors talk about returning power to counties and other, smaller districts. This is yet another way of passing the buck because the state won't be footing the bill any longer. And the county has no money, either. Not much of a deficit reduction plan, is it?

Cities, states, and the federal government get their money from tax revenues that come primarily from sales and real estate assessments. We all know that the housing market has lost much of it's value and, what with the ensuing recession, folks aren't spending as much. It should come as no surprise that every public sector is scrambling for money while trying to maintain an expected level of service.

We can also expect to hear the continued rhetoric of spending less. Last week's State of the Union address spoke of "investing" in our future. Opponents of such largess equated the term with "spending". If you spend $10 for two cups of coffee, you've spent $10. But if you take that same $10 and buy a computer program that helps your kids learn, you've made an investment in their future. Not all spending is bad and, much like our leaky roof, we must continue to invest if we are to hold out any hope for a better tomorrow.

It's time to tighten our proverbial belts a notch or two and suck it up for a period of time until our financial ships are returned to calmer waters. Yes, our ox will get gored, along with everyone else's. And we need leaders rather than politicians. Folks that will ignore politics for the good of the country. I'd say that offers us a better outcome than the partisan-politics-oriented picking fly poop out of pepper, wouldn't you?