By L&T Publisher Earl Watt
There is a big difference between the way Washington handles the budget and the rest of us.
Washington likes a “clean” bill in approving all expenditures in one fell swoop. Later, they will automatically raise the debt ceiling to cover all the spending they couldn’t afford in the “clean” bill they passed.
For average Americans, there is no such thing as a “clean” budget.
They are messy, full of unexpected expenses, and are required to balance out at the end of the work week.
For most Americans, “piecemeal” budgeting makes much more sense.
Yes, the car may need new tires, or the television is on the fritz, but the electric bill is also due. Which one do we pay first? Do we simply cover them all with a “clean” bill, or if we are not sure we can afford a new television or tires on the car, do we go ahead and cover the electric bill?
After that is paid, we tend to see how much is left. Since we need our car to get the kids to school and to get ourselves to work, tires take priority over the television. The kids may disagree, but that’s why the grown-ups handle the budget. There is still enough left in the bank account for tires, so we go ahead and make that “piecemeal” purchase.
Again, it’s not “clean,” but we feel like we are making progress.
Now, we come down to the television, and there just isn’t enough money in the bank to buy a new one.
We have some options.
We can buy a smaller television, or we can charge the purchase on a credit card, or, if we wait until the next paycheck, barring any other unforseen expenses, we can get the television we want.
What do we do?
If we had passed that “clean” bill in the first place, we would be watching television already.
If we charge the credit card, we hit the limit and won’t be ready for an emergency later.
If we wait, we still have money in the bank, and we can get the television in a couple of weeks.
That’s the way Americans handle their budgets. But try to pass a bill to fund the national parks, and Senate Majority Leader Harry Reid said, “What right do they have to decide what gets funded?”
That’s the way it works in the average American household, Harry — pay what you can now, and keep working on the rest as you go.
But Harry wants to watch television tonight, at any expense.
Just pass it all, don’t look at the details.
Average Americans don’t have that luxury, Harry. They don’t have a bottomless pit of money.
One of the reasons they don’t is because they are funding Washington’s “clean” bills.
When Americans see their spending increasing, they can’t tell the credit card company, “I’m spending way more money than I make. Please increase my limit.”
They have to trim their spending. And they have.
But the government has not, and that has increased the burden on taxpayers now as well as future taxpayers.
If the average American wants to increase spending, they have to find a way to increase income, which means a second job.
And Washington thanks you, because they get to collect more taxes on that income, too. They would prefer you get a third job.
According to whitehouse gov, since 1970, only four years did the government spend less than it brought in (three years under Bill Clinton and one year under George W. Bush).
In the past four years, the government has brought in an average of $2.255 trillion in revenue but has spent $3.428 trillion, borrowing $1.273 trillion on average per year to make up the difference.
The median household income is slightly over $30,000 per year.
If average Americans did their budget like Washington, they would earn $30,000 but spend $47,619. To make up the difference, they would simply increase their credit card limits by $18,000 every year even though they do not have the money to pay it.
Maybe it’s time Washington starts to piecemeal together a budget like the American people.