I had originally planned to write about how I hate parades and my odd attraction to moving today, but unfortunately, today’s headlines set me off.
The high fiving white guys in the House have said they will shut down the U.S. government if they don’t get their way. That means people like my 84 year old mother, who relies on Medicare and Social Security to survive, won’t get any money. And that really pisses me off.
Of course, the threat comes over the whole national debt issue, which has been going on for decades but only now seems to be an important issue for the Congress. After years of spending wildly on pet projects and defense boondoggles, they have suddenly figured out we’re in trouble.
I know these guys make an awful lot of money. You don’t get to be a high fiving white guy in Congress if you’re poor. The poor never get to represent us. Hell, even the middle class doesn’t.
I only mention this because these guys don’t seem to understand the basics of reining in a budget. I’ll bet you do. I know I do. We have to make those tough decisions every day.
We may have just lost our job or had a serious accident and are laid up for a time. We may have lost all the equity in our house and owe more on it than it’s worth. We may have had an unexpected expense, like needing a new roof. Or, like Congress, we may have just went nuts with the credit card and now we’re maxed out.
What do we do? We tighten the old belt. We eat some Mac and Cheese. We keep the 20 year old clunker instead of getting the new car. In a nutshell, we make do.
As a small business, I know how important it is to control expenses. Over the past two years, it’s been tight. But I don’t drastically cut my budget to make ends meet. Yet, that’s what the high fiving white guys want to do.
Let’s say the government is run like a business. I know, scary thought – total fantasy. But let’s pretend anyway for the sake of argument.
As a business, I have control over two things: revenue and costs. There are some costs I can’t cut. That’s overhead. Let’s say Social Security and Medicare are overhead in government. While I can’t eliminate overhead, I can cut out waste. For example, my mother has to have umpteen visits from government officials who need to justify their jobs by making sure she’s really disabled, old and poor every year. Not once, annually. I bet we can reduce the number of times she has to be seen and the amount of paperwork she has to generate.
We could also get rid of the really weird laws. For example, did you know that if you were married to someone for 10 years and don’t remarry, that you can get a percentage of your ex’s Social Security? You don’t reduce his or her check, mind you, you get an additional check using money that comes out of our pockets. Do the high fiving white guys address this? No.
I can also control expenses by not investing in things I don’t need. For example, I may make due with a computer that’s a couple years old instead of getting a new one, or duct tape my printer together so I don’t have to replace it. I’ll bet our government doesn’t do that. Worse, they invest in things we don’t even need or want. Case in point, the Osprey. We have these aircraft in production, but not because the Marines wanted them. Lobbyists for Boeing and Bell wanted us to have them. Make do with helicopters folks. They get us there, too.
That’s part of the problem with government spending. All the high fiving white guys have “shiny new toy” syndrome. Remember the Bridge to Nowhere in Alaska? $398 million. In Florida, the Ares rocket is still being funded and worked on, even though it has been cancelled. Something like $200 million this year alone.
So, that’s another way that government can bring down spending, cut real waste, not make headlines by wielding an ax.
In business you don’t do it all at once. You make many small changes over time, not big sweeping ones. As a business, I continually look at the projections and rein in here and there. Like one pundit said, “cutting off your arm and leg will make you lose weight, but most doctors don’t recommend it.”
We aren’t going to solve the deficit and debt overnight. But we can go on a diet a bit. And I bet they could keep public television and the National Endowment for the Arts if they made the Defense Department sign contracts that were fixed cost and not black holes of cost overruns. If the project goes over budget because of something the contractor did, so sad for them. Eat the cost. I have to in my business.
Which brings me to the other side of the coin, revenue. If my business is running in the red, I can fix it by increasing revenue. Theoretically, in a business, there’s no limit to the money I can make. Government has a more difficult job, since they can only do it by reducing waste, improving collections and raising taxes.
As an aside, the high fiving white guys could also increase revenue by focusing on getting people back to work. That takes them off the public rolls (expense) and puts them back in the taxpayer column (revenue). Now there’s a big duh!
Right now, everyone talks about tax cuts. They’re very popular with voters. But think about it in your own world. If you need to make money, you perhaps ask your boss for a raise or take a second job. You sell off some stuff you don’t need.
If you have bills to pay, you certainly don’t cut your income. You don’t go to your boss and say “hey, I want you to keep more of your money.” That’s nuts!
A lot of politicians say we shouldn’t make the wealthy pay more than their fair share. But the budgets of the wealthy don’t work like yours or mine. Julia Roberts gets paid $20 million for each film she makes. I don’t begrudge her this. However, I read an interesting article once that made comparisons to her cost of living and ours. It goes roughly like this. If we need a $2,000 item, say a new computer, it costs you $2,000. If Julia buys the same thing, it’s like $20 to her. The same would be true if I was talking about taxes. A $2,000 tax bill would break us, but to the wealthy it’s like shelling out a twenty. It’s not that big of a deal.
Even Warren Buffett and Ben Stein said they would be happy to help the country out by giving more than their share – they said he don’t need all that extra money.
I don’t mind paying my fair share either. As a corporation, I get off easy. I get the same tax breaks as the big boys. Thanks to all the loopholes, I pay very little to Uncle Sam. You know what GE paid last year in taxes? $0. That’s right, a big fat goose egg. There are so many credits and write offs and shell games that their accountants can use, that they paid nothing, nada, to the government. That is just wrong!
So, what would I do? First, I’d create a budget that is sensible. I’d raise revenue by getting rid of these stupid tax cuts and all the tax breaks for the wealthy and businesses. I’d then cut spending back. A little this year, more next year and still more the next and the next. For example, just stop hiring. When someone leaves, don’t replace them. Eventually, government gets smaller without just making wholesale cuts that put people out of work. This makes it less painful and in 20 years, the bill is paid off. That’s what we all do with credit cards, so why can’t the government?
We all know that going on a diet is a recipe for failure. We will restrict our food intake, count calories, then one day we simply go nuts and pig out on a triple cheeseburger, large fry and shake for lunch, then head to the all you can eat buffet that night.
Mark my words. After all the media sound bites, tough words and threats to shut down the government, the high fiving white guys will be heading back to the buffet line for seconds. They simply can’t resist it. All while we and my mother starve on the scraps they throw us.
Counting my days and my pennies here on the Treasure Coast,
— Robb