Right now, that really is the question. The question. If you read the polls, read the articles, and read the comments, it is obvious that the American economy is the single leading question mark in the current political debate. The two sides can be nicely summed up with comments I saw today: "Any businessman knows you have to spend money to make money," and, "If I cut the budget at home, it works."
Neither side seems to understand that those are both oversimplified. You have to spend money to make money, but you also have to be careful where you spend your money and I've never worked for a company that didn't spend as much time cutting spending as it did spending. Cutting the budget is great and often necessary, but you do have to eat and pay the bills. You are liable to dislike the results if you decide the utilities bill is something you can cut from your budget.
That nicely sums up the problem with the ongoing debate. We'll ignore, for the moment, the fact that America is not a business (we'll come back to it though) and simply take the two sides for what they are. The first statement does still apply. While we do not often think of it the same way, you do still have to spend money at home in order to make money. You have to spend money on the gas to get to and from work (even if you work from home, there is still an effective travel expense in higher utilities or internet bills). You probably have to spend money on eating away from home. In most careers, you have to spend money on having the proper clothes and grooming. You may have to spend money on child care. Yes, even at home you have to spend money to make money.
However, you do not spend money on that fancy three-piece suit and claim that it is an expense to make money if you work at the local grocery store (maybe, if you hold a few specific positions at that store, but that is unlikely). You don't spend money on that shiny new game console and claim that is spending money to make money. You don't spend money on a brand new F150 and claim that is spending to make money when you work a minimum wage job six blocks down the street.
You have to spend money to make money, but you have to spend money the right way. In your home budget, when your spouse questions your extravagant spending, you don't get to dismiss those concerns by simply saying, "I'm spending money to make money." If you can't show how you're spending money to make money, the next bit of money you spend might be on a divorce lawyer.
Likewise, you can't just cut spending anywhere you want in order to save money. You have to eat. Even if you grow your own food, you will probably still have to spend money on basic supplies and tools. Unless you prefer the Stone Age (and can somehow get your family to play along), you probably do not have the choice of cutting the electric bill from the budget and, if you live in town, you won't be cutting the water bill either. There is a certain amount of spending that cannot be cut, though most of it can possibly be reduced (use less electricity, eat cheaper foods, etc.). You cannot, however, reduce expenses to zero and still be a household. Reducing expenses to zero results in homelessness, quite the opposite of a household.
A nation is not a business (told you we would get back to that). That is, a nation is not in the business of making a profit. A nation does not do things for the purpose of making money. A nation makes money for the purpose of paying required bills and providing required amenities, like a household. A nation is a very large household. Aside from removing the profit motive, however, we have seen that the rules don't change very much. They do change in one significant way, though. A nation does not get to say that it requires a certain tax because that tax would generate a certain revenue. That is the province of business. A nation must say that it needs this revenue to cover this expense. That is the province of a household. I have no sympathy when I see those budget reports that say the government is losing X amount of dollars by not charging X tax or fees. Too bad! It's my money, not yours. You are the employee, not the employer. Show me why you deserve that extra pay and then we can discuss it.
As long as our nation is spending extra money on unnecessary Playstations, F150's, and three-piece suits before paying the basic, required bills, though, I don't want to hear any crying about how it can't afford to pay the basics. There is a certain kind of person who answers every budget discussion with, "You want this but you don't want to pay for it," and then believes the discussion is over. No, I want this and don't want to pay for a Playstation and this. If this basic, necessary expense can be covered by eliminating the cost of the Playstation then why should I pay more before the cost of the Playstation is eliminated? Don't tell me you need more money while you're still spending to play before you've paid the bills. I have to pay the bills first and the government should be no different.
You have to spend money to make money, but you have to spend the right money in the right way. Right now our government spends so much money on extra bells and whistles that there is absolutely no point in even discussing raising taxes on anything until those bells and whistles have been addressed. We on different sides of the debate will no doubt disagree on what constitutes an extra bell and whistle, and we should be discussing that, but most of us agree that there are extra bells and whistles, which are costing us a fortune. Yes, we need to spend and cut but, like any household, we need to look at where we can cut before we start looking at where else we can spend.
Showing posts with label budget. Show all posts
Showing posts with label budget. Show all posts
Friday, September 3, 2010
Monday, November 30, 2009
Confusing Reports - Very Important!
I'm reading about the new CBO report on the Senate health bill and I have to admit that I'm confused. Democrats (and most left-leaning news sources) are praising the report as a boon to their cause, but it sure doesn't look that way to me.
According to the New York Times, "Before taking account of federal subsidies to help people buy insurance on their own, the budget office said the bill would tend to drive up premiums." Subsidies would drop the premiums by 56% to 59%, for those who receive subsidies but, for those who don't receive subsidies and have to buy insurance on the individual market (the self-employed and those who cannot buy insurance through an employer), there would be an average increase in premium costs of 10% to 13%. Those who buy insurance through their employer should expect relatively no difference in premium costs, according to the CBO. Wait a minute! Aren't those who can't get insurance through their employer exactly who this reform is supposed to be helping? And these are the people who can expect a 10% to 13% increase in premium costs. What a way to be helpful!
It gets worse, though. The budget office says, "the proposal would tend to increase premiums for people who are young and relatively healthy", in other words, the very people who wouldn't even ordinarily be buying insurance if they weren't being forced to do so. So not only are we forcing people by law to buy something they don't want, we're also forcing them to pay more for it than it should cost. While we're at it, we are penalizing the young and healthy, the very people who, by all natural standards, should be able to expect lower health insurance costs, the people who should be rewarded for not being high risk.
Indiana Senator Evan Bayh claims, "This study indicates that, for most Americans, the bill will have a modestly positive impact on their premium costs." Most Americans? Are you honestly going to try to tell us, with a straight face, that "most Americans" will be receiving federal subsidies? There is not a subsidy program in this country, of any type, that even a quarter of Americans qualify to receive. There is less than zero chance that this subsidy program will apply to "most Americans" and that the cost of that subsidy will be kept down to $450 Billion over 6-8 years (the CBO places the cost of the subsidies - not counting any other costs - at $450 Billion over the next 10 years but the subsidies don't even go into effect until 2014 or 2016, depending on which version of the law you read, so they really don't get to count the first 2-4 years).
This latest report makes it even more clear that we are being lied to. This bill will not result in universal coverage (despite being the claimed goal, it has been admitted from the beginning that this would not happen), it will raise health care costs for many Americans, and - if the accuracy of past CBO estimates on major federal programs is any indication - it will raise the deficit. Congressional and Senate Democrats are lying, plain and simple.
I don't deny that some form of health care reform is necessary, but this boondoggle isn't it. Please spread the word and do not be misled by the positive spin being applied by the Democrats and the media. This report states, in its own words, that young and healthy people will pay more for health insurance. This report states, in its own words, that those who do not receive federal subsidies will pay more for health insurance. This report states, in its own words, that this reform will not help the people this reform is meant to help. I don't care which side of the debate you're on. Read the report, not the spin, and realize that you're being sold a bill of goods. You're being lied to and it's about time you got angry!
According to the New York Times, "Before taking account of federal subsidies to help people buy insurance on their own, the budget office said the bill would tend to drive up premiums." Subsidies would drop the premiums by 56% to 59%, for those who receive subsidies but, for those who don't receive subsidies and have to buy insurance on the individual market (the self-employed and those who cannot buy insurance through an employer), there would be an average increase in premium costs of 10% to 13%. Those who buy insurance through their employer should expect relatively no difference in premium costs, according to the CBO. Wait a minute! Aren't those who can't get insurance through their employer exactly who this reform is supposed to be helping? And these are the people who can expect a 10% to 13% increase in premium costs. What a way to be helpful!
It gets worse, though. The budget office says, "the proposal would tend to increase premiums for people who are young and relatively healthy", in other words, the very people who wouldn't even ordinarily be buying insurance if they weren't being forced to do so. So not only are we forcing people by law to buy something they don't want, we're also forcing them to pay more for it than it should cost. While we're at it, we are penalizing the young and healthy, the very people who, by all natural standards, should be able to expect lower health insurance costs, the people who should be rewarded for not being high risk.
Indiana Senator Evan Bayh claims, "This study indicates that, for most Americans, the bill will have a modestly positive impact on their premium costs." Most Americans? Are you honestly going to try to tell us, with a straight face, that "most Americans" will be receiving federal subsidies? There is not a subsidy program in this country, of any type, that even a quarter of Americans qualify to receive. There is less than zero chance that this subsidy program will apply to "most Americans" and that the cost of that subsidy will be kept down to $450 Billion over 6-8 years (the CBO places the cost of the subsidies - not counting any other costs - at $450 Billion over the next 10 years but the subsidies don't even go into effect until 2014 or 2016, depending on which version of the law you read, so they really don't get to count the first 2-4 years).
This latest report makes it even more clear that we are being lied to. This bill will not result in universal coverage (despite being the claimed goal, it has been admitted from the beginning that this would not happen), it will raise health care costs for many Americans, and - if the accuracy of past CBO estimates on major federal programs is any indication - it will raise the deficit. Congressional and Senate Democrats are lying, plain and simple.
I don't deny that some form of health care reform is necessary, but this boondoggle isn't it. Please spread the word and do not be misled by the positive spin being applied by the Democrats and the media. This report states, in its own words, that young and healthy people will pay more for health insurance. This report states, in its own words, that those who do not receive federal subsidies will pay more for health insurance. This report states, in its own words, that this reform will not help the people this reform is meant to help. I don't care which side of the debate you're on. Read the report, not the spin, and realize that you're being sold a bill of goods. You're being lied to and it's about time you got angry!
Thursday, July 16, 2009
One Giant Leap
On July 16, 1969, people waited with anxiety and baited breath as we launched one of the most historic missions of exploration that mankind has yet seen. Not a continent or an ocean would be crossed this time. No, on that day we set out to cross the gulf of space itself and set foot on a land never before marked by human prints. And we did it!
"One small step for a man, one giant leap for mankind."
Today is the 40th anniversary of the Apollo 11 mission to the moon and mankind has continued to leap forward in ways Armstrong could not have anticipated. Sadly, however, we have not continued on the path he would have naturally assumed. Our space program has done little to push forward the human spirit of exploration and the moon is still untrod and largely unexplored.
Yet there have been great advances. Much of the technology we take for granted today is a direct offshoot of the space program and such projects as Hubble and the Mars rovers do continue our quest for knowledge and understanding. Of course, the space station is pretty much a bust, but it was terribly designed in the first place (the very idea of having a bunch of countries who can't ever agree on terrestrial subjects get together and "coordinate" the building of a giant object in space is laughable when you think about it). And Hubble will probably start falling apart now that there are no more maintenance missions scheduled because shortsighted bureaucrats failed to plan ahead for the end of the shuttle program. And the Mars rovers ... Actually, that program exceeded life expectancy quite some time ago and continues to go fairly strong. Now if only there were something planned to follow it.
Do I sound grumpy? That's because I am. The human race is defined by scientific achievement and exploration and yet we still have people who want us living in the Dark Ages. Today, ABC (that bastion of journalistic integr... sorry, I can't quite complete that, even as a joke) ran a headline which read, "Apollo 11 Anniversary: Debate Continues", and the opening sentence claims that "the argument rages." Informal poll: ask around your office and see how many people are raging about the Apollo missions. There are those who claim that with "the trillions of dollars we have spent on the space program, all we have are some moon rocks, several tons of space junk and a dozen and a half or so dead astronauts," as they type their complaints using microprocessors and satellite communication they forgot to list. There are even those who still insist that the moon landing never happened, who argue that, even with today's technology, we could not accomplish such a feat. Of course they're right. Man could never fly in a giant metal tube or accurately plot the movements of stellar bodies or design pressure suits that were proof against vacuum or ... Wait a minute. Isn't this all rather easily contradicted?
There are always those who insist that nothing else should be done until the poor are fed or the homeless are housed or something else of that sort, and these people also merrily type away their complaints on their computers using their high speed internet, totally oblivious to the internal contradiction. They're also oblivious to the fact that the budget for the space program is minuscule compared to the budgets (notice the plural?) for the various Help the Poor programs and there isn't a chance in the world that adding that small amount to the existing poor programs budgets would make any difference at all. Meanwhile, continuing the research that goes on in the space program very well could have direct and indirect side effects that do help those other programs. Shortsightedness rears its ugly head again!
But "if you don't have the money to begin with ANY expense is too much." I actually saw someone make that argument against pointing out how small the space program budget is compared with budgets for other programs or the GDP as a whole. It's amazing how many people will make this argument against a small expense but will not make it against the huge expenses. If we cannot afford the relatively small expense of the space program then why did such a significant percentage of the "stimulus bill" go toward expanding various liberal programs that cost so much more? How many of these people would argue for cutting welfare or Medicaid or Social Security payouts or HUD etc etc because we can't afford them?
Probably the largest reason I am grumpy, though, is the simple fact that the Apollo 11 moon landing was one of the most important and historic achievements the human race has ever seen and yet, forty years later, shortsighted bureaucrats and even more shortsighted sheep - I mean citizens - have prevented us from doing anything that really built on that. We're marching in place! Granted, we are at least marching in a place where there is still valuable knowledge to be gained, but we could be doing so much more. It's there! Why aren't we reaching for it? Have we, as a species, become so pathetic that we no longer see the joy and honor in striving for the difficult but great accomplishments? I sincerely hope not but sometimes I look around and I worry.
Neil Armstrong, Buzz Aldrin, and Michael Collins were heroes in a classic sense, in a way that too many people know nothing about anymore. They saw the distant and the dangerous and the great and they reached for it. In reaching, they conquered, and they reminded us that we can be great. They inspired a world, and that is what a hero does. We could use some of that inspiration today. We need to remember greatness and we need to remember that we can be great.
To everyone who was involved with Apollo 11, happy anniversary and thank you for the gift we have yet to earn. Some of us really are trying.
"One small step for a man, one giant leap for mankind."
Today is the 40th anniversary of the Apollo 11 mission to the moon and mankind has continued to leap forward in ways Armstrong could not have anticipated. Sadly, however, we have not continued on the path he would have naturally assumed. Our space program has done little to push forward the human spirit of exploration and the moon is still untrod and largely unexplored.
Yet there have been great advances. Much of the technology we take for granted today is a direct offshoot of the space program and such projects as Hubble and the Mars rovers do continue our quest for knowledge and understanding. Of course, the space station is pretty much a bust, but it was terribly designed in the first place (the very idea of having a bunch of countries who can't ever agree on terrestrial subjects get together and "coordinate" the building of a giant object in space is laughable when you think about it). And Hubble will probably start falling apart now that there are no more maintenance missions scheduled because shortsighted bureaucrats failed to plan ahead for the end of the shuttle program. And the Mars rovers ... Actually, that program exceeded life expectancy quite some time ago and continues to go fairly strong. Now if only there were something planned to follow it.
Do I sound grumpy? That's because I am. The human race is defined by scientific achievement and exploration and yet we still have people who want us living in the Dark Ages. Today, ABC (that bastion of journalistic integr... sorry, I can't quite complete that, even as a joke) ran a headline which read, "Apollo 11 Anniversary: Debate Continues", and the opening sentence claims that "the argument rages." Informal poll: ask around your office and see how many people are raging about the Apollo missions. There are those who claim that with "the trillions of dollars we have spent on the space program, all we have are some moon rocks, several tons of space junk and a dozen and a half or so dead astronauts," as they type their complaints using microprocessors and satellite communication they forgot to list. There are even those who still insist that the moon landing never happened, who argue that, even with today's technology, we could not accomplish such a feat. Of course they're right. Man could never fly in a giant metal tube or accurately plot the movements of stellar bodies or design pressure suits that were proof against vacuum or ... Wait a minute. Isn't this all rather easily contradicted?
There are always those who insist that nothing else should be done until the poor are fed or the homeless are housed or something else of that sort, and these people also merrily type away their complaints on their computers using their high speed internet, totally oblivious to the internal contradiction. They're also oblivious to the fact that the budget for the space program is minuscule compared to the budgets (notice the plural?) for the various Help the Poor programs and there isn't a chance in the world that adding that small amount to the existing poor programs budgets would make any difference at all. Meanwhile, continuing the research that goes on in the space program very well could have direct and indirect side effects that do help those other programs. Shortsightedness rears its ugly head again!
But "if you don't have the money to begin with ANY expense is too much." I actually saw someone make that argument against pointing out how small the space program budget is compared with budgets for other programs or the GDP as a whole. It's amazing how many people will make this argument against a small expense but will not make it against the huge expenses. If we cannot afford the relatively small expense of the space program then why did such a significant percentage of the "stimulus bill" go toward expanding various liberal programs that cost so much more? How many of these people would argue for cutting welfare or Medicaid or Social Security payouts or HUD etc etc because we can't afford them?
Probably the largest reason I am grumpy, though, is the simple fact that the Apollo 11 moon landing was one of the most important and historic achievements the human race has ever seen and yet, forty years later, shortsighted bureaucrats and even more shortsighted sheep - I mean citizens - have prevented us from doing anything that really built on that. We're marching in place! Granted, we are at least marching in a place where there is still valuable knowledge to be gained, but we could be doing so much more. It's there! Why aren't we reaching for it? Have we, as a species, become so pathetic that we no longer see the joy and honor in striving for the difficult but great accomplishments? I sincerely hope not but sometimes I look around and I worry.
Neil Armstrong, Buzz Aldrin, and Michael Collins were heroes in a classic sense, in a way that too many people know nothing about anymore. They saw the distant and the dangerous and the great and they reached for it. In reaching, they conquered, and they reminded us that we can be great. They inspired a world, and that is what a hero does. We could use some of that inspiration today. We need to remember greatness and we need to remember that we can be great.
To everyone who was involved with Apollo 11, happy anniversary and thank you for the gift we have yet to earn. Some of us really are trying.
Tuesday, December 23, 2008
A Fantasy Budget
Imagine that you were sitting around the dining room table working on the family budget and discovered a $42 billion shortfall. Okay, so you're not likely to see that particular number while doing the family budget, but imagine finding that you're going to be flat broke, completely out of money in just two months. What would you do? What steps would you take to try to keep your family solvent?
Well, if you were part of the California state government what you would apparently do is point the finger at everyone else and then decide to do nothing at all for another month and just rely on IOUs to pay your bills. Of course, if you tried to use IOUs to pay your bills, you would get notices from those bill collectors saying, in essence, "yes, you do and we're shutting off service until you pay them."
I'm trying hard to comprehend this. California is usually looked at as the leader among progressive governments in the west. They're the role model. And they're rich! One of the wealthiest states in one of the wealthiest countries in the world. There are more mansions packed into twenty square miles of California than most states have from border to border. They are one of the global capitols of entertainment.
And they can't pay their bills. Maybe we should send a few housewives to Sacramento to give classes on budget balancing.
If you or I were faced with this situation, we would probably try to find a second job. Of course, there are only so many jobs and so many hours in the day so the feasibility of this plan is limited. Failing an extra income, it would be time to sit down with the red pen and start slashing out unnecessary items from the budget. Yes, cable television would be nice but eating is so much more important, so see you later TV. The mortgage takes priority over steak and caviar, so we'll be eating sandwiches and ground beef. The children have to have shoes and coats so we'll forego the designer labels and expensive haircuts.
That's how those of us who live in the real world deal with budgets every day. We would somehow have to get politicians to understand the difference between need and really really want, but most of them used to have real world lives. Didn't they?
Well, if you were part of the California state government what you would apparently do is point the finger at everyone else and then decide to do nothing at all for another month and just rely on IOUs to pay your bills. Of course, if you tried to use IOUs to pay your bills, you would get notices from those bill collectors saying, in essence, "yes, you do and we're shutting off service until you pay them."
I'm trying hard to comprehend this. California is usually looked at as the leader among progressive governments in the west. They're the role model. And they're rich! One of the wealthiest states in one of the wealthiest countries in the world. There are more mansions packed into twenty square miles of California than most states have from border to border. They are one of the global capitols of entertainment.
And they can't pay their bills. Maybe we should send a few housewives to Sacramento to give classes on budget balancing.
If you or I were faced with this situation, we would probably try to find a second job. Of course, there are only so many jobs and so many hours in the day so the feasibility of this plan is limited. Failing an extra income, it would be time to sit down with the red pen and start slashing out unnecessary items from the budget. Yes, cable television would be nice but eating is so much more important, so see you later TV. The mortgage takes priority over steak and caviar, so we'll be eating sandwiches and ground beef. The children have to have shoes and coats so we'll forego the designer labels and expensive haircuts.
That's how those of us who live in the real world deal with budgets every day. We would somehow have to get politicians to understand the difference between need and really really want, but most of them used to have real world lives. Didn't they?
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