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Wednesday, January 23, 2013

Budgeting 101, Share With Your Congressman

                Budgeting Requires Discipline and Accountability

        Budgets do not start with what you want to spend.  They start with what you "have" to spend. When you have figured out how much you have to spend you take 95% of that sum and divide that by the number of pay periods you have in spending time frame.. Then it is a matter of developing priorities. You decide what you have to have as part of that 95%. The 5% that is left will have to be divided up to pay off any overages over a fixed amount of time.  Anything above 100% of that total number must be eliminated.  You can not afford it.  It is called living beyond your means.  This problem must be solved.  It is not done by writing hot checks or by spending other people's money.  That is the part of budgeting that Congress has no clue about.

      Living beyond your means is not acceptable behavior.  The first thing you do is see if any of the things in your budget may be eliminated, delayed or substituted for something in the 5% expenditures..  Everything in the budget should be necessity items.  Tax breaks for corporations and individuals that do not apply to every American equally are the first things that need to go. Every expenditure should be accounted for individually.  It should stand on its own. If it does not it is called pork and needs to be cut. Money for the Alaskan Fishing Industry needs to go.  A few minutes on the internet can produce a long list of what pork projects look like and how they come to be in the budget.

      What is needed is a spending test.  Does what is being proposed benefit every American equally? Could every American equally benefit? A good example is disability benefits. All Americans may qualify for it, but that does not mean all Americans receive it. If a person does qualify for disability there are clear guidelines as to how much they will get. Does where someone live eliminate them from the benefit? This test should be applied to every dollar spent.

     Only two things should be exempt.  The first is Veterans Benefits as they gave the ultimate price and invested their lives in this country. The second is Social Security.  It is an account that was paid into by the working class Americans. The money for that program is their own money.  They invested in the system. All other programs and expenditures including government salaries and pensions should be on the table.

      Another rule that should be imposed is that unless money is requested it can not be appropriated. There is presently an attempt to budget 2.5 Billion dollars for 10 cargo aircraft. Which is about $250 Million dollars per plane, which is insane. The Department of Defense did not request the funds.  Someone submitted the proposal and incorporated it into the budget request.  How about a 4.5 million study on the feasibility of burning firewood.  Then there is $17 million dollars for the International Fund for Ireland.  I am sure that benefits a lot of Americans as it is spent in Ireland.  Finally how about $26,300,000 for gym memberships on one Naval Base.  The list could go on and on. Not all the requests are for millions and millions of dollars.  Many are for just a few thousand dollars. An example of total extravagance and waste is $57,000 to buy gold embossed playing cards for Air Force 2.  The simple question of why and who benefits could or should have eliminated many of these from the budget.

      The problem is there are no guidelines on how money is spent or how it may be appropriated.  If there are guidelines they are not strict enough and are not being followed.  I am sure 80% of all Americans would vote to eliminate all the expenditures I listed above.  The problem is that Congress does not account to the American public. As long as they get some pork for their districts, their constituents will be happy and reelect them.

     The lack of accountability applies to both sides of the aisle.  The Democrats are not giving up any pork they have already gotten.  The Republicans on the other hand are not about to appropriate any money to pay for wars and benefits they already have spent.  They did not fund the wars, but they refuse to appropriate the funds or taxes to do so.  It is bit hypocritical on their part.  The whole situation is totally out of hand.  Someone needs to make the politicians realize the money they are spending is not theirs to spend.  It is the taxpayers money.  The taxpayers need to "demand accountability."  One way to accomplish that is give the President a line item veto and then demand he use it.

     With the present system, once it is in the budget it is spent.  Regardless of how stupid the expenditure is.  Giving the President a line item veto will let us at least know who to ultimately blame for the fiscal incompetence we are seeing in Washington.  The President may give lip service to wanting a line item veto.  The reality is that he does not want the responsibility.  He benefits as much as Congress  from the status quo.  

     The trick is that there is no one who wants to be accountable in Washington.  Under the present system no one has to be or is accountable.  That is the perfect storm for Congress and a perfect nightmare for the taxpayer.  When the economy finally collapses as, it is guaranteed to do if things continue the way they are.
All the politicians will say it is not their fault.  They will say to their constituents look what I did for you.  The problem is they need to be held accountable for what they are doing to America.  They are destroying it and and the American way of life.

      Freezing the budget and demanding accountability is going to hurt.  As a history buff and being well read on the Great Depression.  I can say earnestly that unless things change we are headed into another Depression.  The problem is that in the 20's the government was solvent and banks and big business were the problem.  Today the government is not solvent and neither are the banks and big business.  A Depression today will make the one in the 20's look like a cake walk.  It will be longer, harder and far deeper than the Great Depression was.  So stick your head back in the sand if you do not care what happens, but it will happen.

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