Saturday, August 25, 2012

Charles Parker: Kitchen Table Common Sense

We had gotten ourselves into debt - more than just the typical home loan, car loan, student loan – and a credit card or two.  We had all of these – and then some.
Some of the debt had been out of our control.  We had unexpected illnesses, car problems, and such.
Some of the debt was out of control.  We bought stuff and went places that we really couldn’t afford.  We justified it of course – we deserved the grill and the trip to the cabin – right?
However, we are getting it fixed. We have a budget. We have stopped using credit cards. We have cut our spending.  We are paying off the debt by “snowballing” the payments.  (I won’t plug a particular money management expert here – but you might know of whom I speak.)
And we have not increased our income. In fact, our income has probably decreased a bit.
While the federal government is certainly a different animal than our household, the analogy can be made as to what needs to happen to get our federal fiscal house in order.
First, our government needs an actual zero-based budget.  I know the US Senate does not want to do the constitutionally hard work that this exercise would entail, but it is a necessity.  The US House of Representatives does their job. It may not result in what the president and the Senate Democrats want, but that is how it works in our system.   After both sides pass a budget – compromise and horse trading can begin.
Second, we have to stop borrowing – now.  A recent article in The Weekly Standard said the following, By the end of this year, the federal debt is expected to be $16.2 trillion, which is $6.2 trillion more than when President Obama first came into office four years ago. Moreover, new analysis by the Republican side of the Senate Budget Committee finds that, over the next 4 years, if Barack Obama remains president and his budget is enacted, $4.4 trillion will be added to the federal debt.”  This is unsustainable.
Third, we have to cut spending – and I’m not just talking about the huge multiple stimuli and bailouts and entitlements.  I’m talking about the common everyday bacon that every congressman and senator worth his or her weight brings home.  I wrote a piece awhile back about our port – who can raise its own money – dipping into the federal trough for a handout.  This happens all over and we must demand that it be over because pretty soon we’ll be in too deep for a do-over.
Lastly, we do not have to raise taxes on high income earners.  I’m not going to re-litigate that argument here except to say the basics that have been proven true if one cares to be honest. 
1.     Small businesses pay the lion’s share of the proposed tax hike on high income earners.
2.     Across-the-board tax cuts accompanied by spending cuts will stimulate the economy and increase revenues.
3.     Increased revenues should be used to balance the current budget.
4.     Once the budget is balanced, excess revenue should then be used to pay down the federal debt.
It’s time for all the yahoos in Washington DC to use some kitchen table common sense.

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1 comment:

  1. Small businesses should not be taxed. To pay the taxes, they reduce the payroll - result is wide spread unemployment. Al Schrader