Posts Tagged ‘economics’

National Debt Reduction

March 10, 2010

I have an idea.

Personally, I think it is pretty good.

We have a huge national debt, with basically no repayment plan.  We just keep spending more money and racking up the debt and I don’t hear much talk about what we are going to do about it.

What if we tied political campaign contributions to debt relief contributions?

If you make a contribution to a political candidate, then, let’s say 50% of your contribution goes to the candidate’s campaign, and 50% goes to debt relief.

Furthermore, any candidate that leaves elected public service should surrender their remaining war chest funds to debt relief.

We really don’t need quite so much money spent on attack ads and telephone solicitation.

We sure could use some help paying off the debt our politicians have created.

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True Security

January 11, 2010

Personal security.

Home security.

Financial security.

Job security.

Airport security.

National security.

All of these issues are important in today’s world.  The papers have been filled lately with lapses in security from the White House Party Crashers to the Christmas Day Bomber; from our banks, to our jobs, to our home loans and our retirement funds.  All of these issues have two things in common. 

The first is that we should properly research, plan, prepare, execute and evaluate.  We should research the pertinent information.  We should make plans that are sufficient for our needs.  We should do the necessary groundwork to be properly prepared.  We should follow through on the execution of the plan.  We should evaluate effectiveness and adjust as necessary.

The second is to realize that all of our best efforts can still be undermined.  

True security comes from God.  Proverbs 21:31 says ” The horse is prepared for the day of battle, but deliverance is of the Lord.” NKJ 

I understand this to mean that it is appropriate for us to make all of the necessary preparations, that we are responsible to do what we can, but, that we should realize that ultimately God is our true security.  Even as we are reminded by the phrase still on our coins, “In God we trust”.   We would do well to remember that.

The Burden of Unemployment

November 24, 2009

The burden of unemployment could be considered from multiple views, society, the family, the individual and the workplace.  This post addresses the burden placed upon the employer.  You see, when congress decided to extend the unemployment benefits, they did not talk very much about the price tag.  The fees that each business must pay to the state for every employee is calculated by the cost of the program.  Extending the benefits meant higher costs.  Higher costs are then passed on to the business.  This year those costs have skyrocketed. 

I thought the goal was to create jobs, not destroy them.

The current unemployment policies are creating a tougher climate in which to survive in business.  How many small businesses will not survive?  How many jobs will be cut to pay for the higher cost? 

Higher minimum wage, higher taxes, higher unemployment costs, tougher, more expensive, environmental guidelines; and soon, if Democrats have their way, forced health insurance or penalties are all combining together to make it very difficult on businesses.  We are creating a very bad climate for the small business. 

What will the future bring?  What are the repercussions of the decisions of our government on the economy?  Where will we be in a few years?  Did America really want this kind of change?

Brain Drain??

October 27, 2009

I read an article the other day about the steep reduction in pay being forced upon the executives of the large banks that had received a government bailout.  The concern that was expressed was that these individuals were brilliant in their fields, and that if they were not paid what they thought they  were worth, that they would quit their jobs to work for someone else.

If they are so brilliant, then why did the government need to bail them out?

For most people, if their area of responsibility had failed miserably, they would be looking for a new job, not cashing bonus checks.  Are they going to put on their resume  “We oversaw the destruction of our last company, now what can we do for you”???

If the government had not bailed them out, either they would have worked themselves out of the hole, or they would have been fired and replaced, or their entire business would be consumed by other businesses that were run more efficiently.  The business world can take care  of itself.  The strong survive, the weak are devoured.

Why did we interfere?

Need versus Want

October 20, 2009

Early in our married life, my wife and I often had conversations about the difference between “need” and “want”.  There are some things that we need, there are many things that we want.

Our government could learn from this simple life lesson.  There are many things that our government is spending money on that are not needs.  When our deficit for a single year tops a trillion dollars, as it has this year, we need to make changes. Change is going to be painful for some, but our governmental leaders should really take a hard look at where our money is going, and they should greatly reduce or completely eliminate things in the budget that are not needed. 

It’s painful, but necessary.  Whether it is personal finance, corporate finance or government finance, the basic principle is still the same.  You need to have more money coming in, than you have going out, or you are in trouble.

As a country, we are in trouble.

Serious Side Effects

September 21, 2009

Congress is considering a bill which will require everyone to obtain health care.  It will also require all companies to provide health care to their employees.  What it doesn’t say is how the individuals, or the companies, are going to pay the cost. 

Most people, and most companies do not have the same opportunity as the government to spend money that they do not have, at least not for very long, and not without serious consequences.

I am very concerned that the cure that congress is offering for our health care issues is going to have serious side effects.  I see a disruption of our economy and our health care system that will be detrimental to the well being of our country.

What’s the Plan?

February 11, 2009

President Bush was severely criticized for not having an exit strategy for Iraq. 

What is the plan to pay back the debt that we are accumulating?  As our congress, pushed by our president, is about to pass legislation that will saddle us with yet another huge bill to pay, I want to know, what is the exit strategy?  How will we get our country out of debt?  Can we even pay the interest?  Before we sign for a loan, can we know the terms?  Where is this money coming from and how will we pay it back?  I don’t hear anything about those little details.

The current crisis in the banking industry has come about because banks made loans to people who couldn’t afford to pay them back.  The loans were bad for both parties. 

At what point are we as a country going to learn that we cannot borrow and spend our way out of our troubles?

At some point, families, businesses, and yes, even countries, must realize that they need to make changes.  They must make hard choices.  They must work on a budget.  They need to make more money than they spend. 

What is the cost?  We are going further into debt by astronomical numbers, lead by our president who proclaims that this is the way.  One thing about debts, they do not just go away.  Sooner or later you have to pay the bill.

Can a country declare bankruptcy?  What happens when the creditors demand payment and we don’t have the money?  Who are the creditors?  Isn’t one of them China?  Does anyone else think it is a bad idea to be deeply in debt to another country?  Especially a communist country? 

What is the exit strategy?

Credit Crunch

November 12, 2008

“The secret to obtaining wealth is to live well within your means.”

I don’t remember who said this, but I remember reading it many years ago.  I suspect that there are many problems in our economy today that were created by people who try to live beyond their means. 

People want things that they do not have the money to buy, so they use credit.  Buy now, pay later.  The problem is that sooner or later, the debt, which will grow substantially,  will have to be paid.  Living on credit is like living in a house of cards, sooner or later, a breeze is going to come up and the house will come crashing down.

That’s what is going on in our economy right now.  The house of cards is coming down all around us.  The government is trying to prop up the house of cards, but there is a pretty strong breeze.

We will have to pick up the pieces and try to build a stronger economy on something other than the unreliable foundation of credit. Individuals, families, and businesses should learn to make more prudent decisions about their spending habits. 

More savings, less credit. 

Buy now, pay now. 

Save some for the future.

Economic Security

September 18, 2008

This past week has not been a good week for the stock market in the USA.  There have been two days of major drops and there are still two days of trading left in the week.  I suspect that some people are truly being devastated by this economic upheaval. 

I am not worried at all.

I have a four part plan for economic security. 

First,  I understand the difference between needs and wants.   We need the basics of food, clothing and shelter.  Beyond that, it is what we want to have that gets us into trouble.  One of the biggest problems that people have today is that they want to live beyond their income.  Credit is available, and people overextend themselves to have something today that they will pay for dearly tomorrow.  Often these are things that people want, but don’t need.  We don’t need steak, designer clothing or large homes.  I understand the diffence between needs and wants, and am willing to live within my income.

Secondly, I create and stay on a budget.  I believe in planning ahead.  I believe in saving for large ticket items, rather than paying the interest on a loan.  I am thankful that my wife agrees with me about this issue, because it takes both of us being willing to work together to make a budget work. 

Third, I have told my sons since they were toddlers, that I will take care of you for the first eighteen years of your life, if necessary, you will take care of me, for the last years of my life.  I hope that it will never come to that, but it is an option that has been used for generations, long before social security or pensions. 

Fourth, and most importantly, since I was sixteen, I have been faithful in giving back to God a tithe, plus offerings, of my income.  I believe that God blesses my finances, at least partially, because I have always trusted that God is my ultimate provider.  He is my true source of economic security.