Gee's Budget Proposal 2011

Ok, so I haven't yet been able to find any links to the transcript of Obama's speech from last night, but I found some snippets that I cut and pasted together from various news articles and commentary pieces....and then re-worded to see how Obama's proposal sounds when it's addressed on an individual (or small family) scale.

I figure, if his "increase taxes and spend more to get out of debt" budget plan works at the government level, then surely it should work for my personal finances too.

Again... I don't have his whole speech, but I think the quotes I did find encapsulate Obama's plan pretty well:

My fellow Americans: 

My household faces serious economic troubles.  Even after our economy recovers, I will still be on track to spend more money than I take in throughout this decade and beyond.  That means I’ll have to keep borrowing more from companies like Capital One.  And that means more of my paycheck will go toward paying off the interest on all the loans I keep taking out.  By the end of this decade, the interest I owe on my debt could rise to nearly $1 trillion. Just the interest payments. 

Some people would have me reduce my credit card spending.  A 70 percent cut in fine dining, a 25 percent cut in Amazon.com purchases, a 30 percent cut in vacations…cuts in massages and hair products.  That’s their proposal.  These are the kinds of cuts that tell me I can’t afford the America that I believe in and, I think, you believe in. 

Therefore, my budget plan for 2011 includes maxing out my credit card and making minimum payments on the interest of my debt, because I shouldn’t have to choose between a future of spiraling debt and one where I forfeit investments in myself.

I believe that any other plan paints a vision of our future that is deeply pessimistic.  It’s a vision that says if my clothes tear and my high heels wear out, I can’t afford to fix them and buy more. If I am a bright young American who has the drive and the will but not the money to go to Disney World, I can’t afford to go. 

To meet my fiscal challenge, you will need to make reforms.  You will all need to make sacrifices. My employer will need to give me a raise.  But, rest assured, I do not have to sacrifice the America I believe in.  As long as I’m in charge of my finances, I won’t. 

Sure, I will make the tough cuts necessary to achieve these savings, including in purchases I care about, but I will not sacrifice the core investments I need to grow.  I’ll invest in Save the Whale campaigns and buy new energy-efficient appliances (even though the ones I have are less than 3 years old).  I’ll invest in a new car, better cable TV and broadband access.

I will do what I need to compete and I will win the future.  

~Gee

Geithner-omics 101 (A Lesson on How to Economically Kill A Nation)

It's often said that the only things in life we can be certain of are death and taxes.  When it comes to Tim Geithner and the federal government, the only thing of which we can be certain is that Geithner's tax plan will certainly be the death of this great nation. 

In his latest arguments favoring the creation of more federal stimulus in an attempt to boost the economy, Tim Geithner’s general ineptitude and vast ignorance of basic economic principles has once again shown its true colors.  According to today’s article from the Wall Street Journal, Mr. Geithner is quoted as saying, “the U.S. can no longer rely on consumer spending, which has long powered the economy.” However, competitive free market economies succeed precisely because of supply and demand, and yes, consumer spending is one such measure of demand.

What exactly does Mr. Geithner think our economy will rely on to stay as prosperous as we are, if it’s not consumer spending?  What will fuel our economy if it’s not the purchase of tangible, necessary products procured by the general population? Happy thoughts? Fairy dust? Carbon credits?

Maybe we should backtrack and DEFINE consumer spending, to see what sort of consumer items Mr. Geithner thinks the U.S. can’t rely on anymore.  Consumer spending, according to the National Bureau of Economic Research, is essentially is any type of public goods consumption that falls into one of approx. 60 categories, including:

·         Clothing

·         Hospitals

·         Physicians, Dentist, Other Medical Professionals

·         Higher Education

·         Nursery, Elementary and Secondary Education

·         Telephone and Telegraph

·         Books and Maps

·         Taxicab, Railway, Bus, and Other Travel Expenses

·         Electricity

·         Water and Other Sanitary Services

·         Furniture and Durable Household Equipment

·         Drug Preparations

·         Scholarships / Foster Children

If we can’t rely on our country to provide an adequate supply of the above-mentioned items to support the free market demand for these necessities, what alternatives do we have as a nation?  I wonder, which of these “luxury” consumer items must the U.S. sacrifice moving forward, according to Mr. Geithner’s vision of a prosperous U.S. nation.  

~Gee

Time to Clean Up the Byrd Droppings

Vladimir Lenin, the Russian communist politician, led the Bolsheviks for 27 years.

Dictator Joseph Stalin controlled the Soviet Union for 29 years.

Henry III reigned over England for 38 years.

Fidel Castro’s Communist ideologies ruled Cubans for 49 years.

Robert Byrd’s tenure in Congress, however, outlived them all and lasted 58 years.

Working in both the House of Representatives and Senate for over a half a century, what legacy does Robert Byrd leave this country after his death early yesterday morning? Despite claiming that “intolerance has no place in America,” he joined the Ku Klux Klan in his early 20’s and even unyieldingly opposed the Civil Rights Act as late as 1964, which he filibustered for over 14 hours. His countless apologies for numerous bigoted statements over the years, however, are sure to be overshadowed by this professional politician’s perpetual push for pork.

Although Byrd occasionally claimed to favor fiscal restraint, his relentless bartering of his vote on bills in exchange for pet project funding proved otherwise. As we mark the end of his clamped hold of the public coffers, no fewer than 30 taxpayer-funded public services projects currently named after him have been left behind. The self-anointed “Big Daddy” of West Virginia cast nearly 19,000 votes during his tenure and brought over $1 billion of pork projects to his state at the expense of taxpayers around the nation from 1995-2006 alone.  Thanks to the Citizens Against Government Waste (CAGW), we the taxpayers have an extensive list tallying Byrd’s pork projects (a.k.a. “Byrd Droppings”) that accumulated over the years. He proudly burned holes in our pockets, claiming: “They call me 'The Pork King,' they don't know how much I enjoy it.” Clearly. Why else would he have erected a bronze statue of himself in his state’s Capitol Rotunda?

Senator Byrd leaves behind a classic example of the fiscal recklessness our Congress continues to force upon the working private sector by funding every personal pet project they can dream up for their individual states.  During a Senate floor debate in 2001, Byrd stated that "one man's pork is another man's job... You can look around and see what I've done." For professional politicians like Byrd, they believe their roles are less about protecting individual liberty and limiting their responsibilities to those within the scope of the Constitution and more about creating personal accomplishments, building a name for themselves, and making history.

Combined with a lack of term limits and a tangled web of gerrymandered congressional districts, politicians conveniently find themselves reelected and continually in a position to redistribute the wealth of the nation at their flawed discretion.  

Ironically, Congress’ approval rating has been on a slow, steady decline over the past few years.  How then, when less than 20% of the population approve of how Congress does its job, do our politicians still have the nerve to pat themselves on the back? How is it, that when their phone lines are perpetually flooded with the begging requests of constituents to oppose bills or at least read the legislation they intend to enforce before casting a vote, that they feel as though they’ve fulfilled their sworn obligation to the public and earned their $174,000 annual salary?

ABC News Contributor Cokie Roberts claimed that Byrd will be remembered “as the guardian of the Senate, as an institution.” If this is true, then our nation can only hope that Senator Byrd’s disgraceful legacy of fiscal irresponsibility will swiftly follow and die with him, so his death can mark the turning point in our history when future Congressmen and women will act as guardians of the Constitution and protectors of the people instead of defenders of their reelection careers.

~Gee

Credit Limit Increases for Congress

Imagine today the household of Sally Spender, a likeable girl from Middleton, U.S.A., who earns $2,000 a month but spends $2,500. At first, she lets herself believe her spending habits aren’t a problem, because she has a great credit score and is obviously reliable, otherwise her credit card companies wouldn’t have given her hefty credit limits with low interest rates.  Besides, she just bought a house, and she’s got expenses that she needs to cover. That couch she just bought home via a 12-month no payment promotion? It’s just a temporary expense, and once it’s paid off, she won’t need to worry about any other furniture or appliances.

After a few years, however, Sally starts consistently reaching her credit card limit month after month so she starts pulling money out of her long-term savings to pay off her interest.  Sally realizes that she doesn’t have enough money to pay for all of her expenses, but eventually, her savings account is empty.  Still, she knows her bills are too big to ignore.  So what does she do?

Common sense tells us that if we were in Sally’s position, we’d stop our spending – immediately. We would sit down, take a good look at our personal finances, and decide what permanent lifestyle changes we’d need to make to stop living beyond our means.  Maybe we’d exchange the expensive phone data plan with a basic one.  Perhaps we’d stop buying a new dress every two weeks, cook our own lunch and dinner instead of eating out, drop the subscription to NetFlix, or do all of the above to ensure we don’t increase our debt beyond our capabilities to pay it back.

Common sense tells us for our personal finances when we are spending too much based on our income.  Common sense tells us when to stop spending and from where we can make adjustments to keep us out of financial trouble.

Common sense tells us that we can’t spend our way out of credit card debt. 

Our government, however, is ignoring common sense.  Congress is spending money it doesn’t have, and it is dragging the country into uncontrollable debt to do so.  We know from our personal finances that we can’t spend our way out of debt, so why does Congress think the rules of common sense don’t apply to their larger, federal budget?

Congress is still trying to brush off this issue as an exaggerated concern brought about by those crazy, fear-mongering, right-wing, talk radio extremists, because they don’t want the public to look at the facts.

However, the fact is, as of December, 29^th, 2009, Public Law 111-123 was signed into law to “the continued financing of government operations” by increasing their spending limit to $12,294,000,000,000. Less than two months later (on Feb 12^th, 2010), Public Law 111-139 was signed into law to approve a public debt increase to $14,294,000,000,000.

Yes, that’s right.  In less than 60 days, Congress raised their “credit limit” and our bill -- not once, but twice -- to allow them to continue increasing spending and increasing our debt.  In less than 60 days, Congress essentially gave themselves a $2,000,000,000,000 credit limit increase.

To continue the Sally Spender analogy (where Sally Spender is playing the role of the irresponsible, indebted federal government), it’s like saying that in order to get the credit card companies give Sally Spender a credit increase, her solution isn’t to examine her spending habits and stop spending.  Her solution is to ask her employer for a raise, so she can simply spend more and dump more purchases onto her credit card debt.

Sound illogical? That’s because it is.

The skeptical employer, by the way, is playing the role of the U.S. public.  After all, the public employs government.  We hire them, we fire them, we pay them, and we finance every single one of their operations.

Congress is our nation’s Sally Spender.  Sally never considered looking at her personal finances to address her spending problem.  She just wandered off to her employer with her outstretched hand, since she figured, if her employer already dumps a paycheck into her bank account at least once a month, there’s no reason why they shouldn’t give her a little bit more, right?

Common sense tells us that the employer would (and should) tell Sally to go fly a kite. 

Common sense tells us that the country’s debt is out of control.  Common sense tells us that Obama's measly $100 million budget cuts (hilariously demonstrated here) won’t be but a single drop in a very, very large bucket.

The federal government thinks it knows how to spend your money better than you do.  Well, common sense tells me that this simply isn’t true.

Happy Tax Day.

~Gee