Stop Spending, Start Saving!

Unless you choose to put your head in the sand, it should be clear that we have created a problem of immense proportions.  Many of us, as individuals are in debt beyond what we can bear.  And, as if that wasn’t bad enough, we are in debt as a country beyond human comprehension.  Many, who see this problem compound it by trumpetting this debt as foreign debt.  While large chunks of it are, United States citizens either directly or through various mutual and other funds own a huge amount of that debt.  So I will acknowledge that is isn’t all foreign, or as big a problem with foreign influence as some will attempt to scare people with.

Let me be emphatically clear, however; that there are natural laws in place which no government on earth, powerful as it may be, can forever circumvent.

That natural law is that the borrower is servant to the lender.  Our Federal Government seems to forget that.  Oh, I know, we’ve eliminated slavery and forced labor here in the United States.  We’re the “land of the free, and home of the brave” after all.  Really?  No, not really!  Not until the United States owes less than it could pay off if it decided to do so, would it truly be free.  Until then, the United States is servant to its lenders.  And we, as citizens of this country, are not truly free either.  Our rugged individualism is eroding, and we are accepting dependence, if not outright reliance, on a growing, wasteful and inefficient government.

If you think that we can continue on this course without consequence, then you have not considered reality.  Do you think it isn’t possible to have a revolution in this country?  That we are too civilized?  Do you really think that the United States can afford another foreign war?  Or, a war within?  Where does war fit into this equation, you may ask?  Well, if China is not paid on the debt they own, would you put it past them to attack us?  Their military strength is growing.  Their population alone dwarfs the United States, so they could afford stunning human casualties.  To those who say our Federal Government would never default on it’s debt, may I remind you that the Federal Government forced the debt holders of General Motors to accept pennies on the dollar for their loans.  Is it any wonder that people and investors are hesitant to loan money, when the government seems willing to step in and force immense losses?  What’s to prevent our government from saying $14 trillion dollars of debt is really only $14 million dollars of debt, causing everyone who holds the debt to lose money?  If you say that can’t happen, then you haven’t looked at quantitative easing.  That’s just a fancy way of saying “printing money”.  If you print enough money, you can make $14 trillion dollars the equivalent of $14 million dollars today.

It is in this context that I share this article from Newsmax.com:

Democrats Play Chicken as Boehner Digs in on Budget

Thursday, 31 Mar 2011 01:27 PM

By David A. Patten and Matthew Belvedere

Michele Bachmann, John Boehner, budget. . .“Between Harry Reid, Chuck Schumer, and Howard Dean, they let the cat out of the bag, and that’s that the Democrats’ political plan is to shut down government because they think they will benefit from doing that. Now we know that, if the government shuts down it’s not the tea party’s fault, it’s the Democrats’ fault, because they’ve made a decision they’re not interested in compromise. They just want to see the government shut down,” Backmann tells Newsmax. . . .

© Newsmax. All rights reserved.

Please click the link above and read the entire article.  Newsmax copyright policy limits a quote to 75 words or less, and we try to follow the rules around here.

One quote in particular caught my eye.

Boehner said he is glad that activists remain involved. But he cautioned that Republicans control just “one-half of one-third of the government here in Washington, we can’t impose our will on another body, we can’t impose our will on the Senate.” – Newsmax.com as above.

 

While this is true, “we the people” need to remind our elected officials that they derive their power from the consent of the governed, not from the position that they hold.

So, getting to the point of this post, let me address what it is that we need to do.  We need to stop spending at all levels.  We need to learn to make do with what we already have.  We need to learn to spend within our means, not outside of it just to keep up appearances.  Then, once all of that is under control, we need to start saving.  Now, if you’re like me, and I suspect you are, you are thinking that means more cuts in spending.  That’s right.  You have to cut spending even more to be able to afford to save.  Why go through this pain?  Why is it important to start saving, and not just be satisfied that debt is being paid down?  I’m glad you asked.  Saving not only forces you to spend less, it makes you wait for a major purchase.  It doesn’t mean you never make the purchase, it just means you have to wait.  Saving means that your entire outlook changes.  Instead of paying for things later, you pay for them before you buy them.

I’m going to interject a personal example here.  Almost 9 months ago now I purchased an iPad.  In the past, I would have gotten it right away if I wanted it.  I would have made all sorts of rationalizations about how I really needed it, when in reality, I just wanted the latest cool thing from Apple.  In this case, I waited for some time, partially because I really wanted to have an iPad with a camera.  However, there was another more important reason.  I actually assessed how I used my then current MacBook.   I realized that it spent most of its time tethered to an external monitor.  In other words it was essentially an iMac.  Upon further thinking, I realized that when I was using the MacBook as a laptop, I was primarily surfing the web, or checking e-mail.  Those are two things that the iPad is perfect for.  So, as a pragmatic step to get me to the point where I could replace my MacBook with an iMac, I went with an iPad.  Going this route put off a $2,000 purchase by at least a year, and only cost $800, a savings of $1,200.  Well, the reality is the savings is actually much higher.  I’ve shaved weight off of what I carry between home and the office each day.  Once we started thinking like this, we actually figured that we could rearrange  our existing iMac computers to put off a new purchase even longer.  That’s te good part about a Mac.  The only reason you feel the need for a new one, is if you make the mistake of using a new one and you see that faster is possible.  Otherwise, these things run circles around PCs.  My apologies to my friends who still think PCs are better, I know how hard it can be to admit there could be something better!

As you might be able to gather from my personal example, we didn’t stop spending altogether.  We simply didn’t go and get everything I wanted.  We figured out how to get more productivity out of what we already had, and how to extend the life of what we already had.  Some would even say if we wanted to save money, we should buy PCs instead.  At the risk of going down a rabbit trail, the cost savings on hardware is real.  However, after supporting Windows based PCs for over 20 years, and dealing with sudden an unexplained inability to find network printers, and other devices, sapping hours of productivity, it is refreshing to now deal with the occasional lost file.  Lost, not because it’s gone, but rather it was used on a different computer.  If it’s just a file, I can connect to every single Mac we own securely over our Virtual Private Network (VPN), and mount those hard drives on my own Mac, and search.  Or, if I don’t want to mount drives, I can log in to those Macs remotely and control the remote machine.  It works every time, unlike my Windows experience.  See, I told you it was a rabbit trail.

Before this becomes so long it takes two sittings to read, let me tie all of this together.  I started by talking about our personal, and then national debt problem.  We need to take responsibility for our own debt first, and then tackle the debt on a national basis.  That would be ideal.  However, we do not have that luxury.  We need to tackle both simultaneously.  If, our Federal government drops the ball and doesn’t reign in spending, then it will become even more important that we address our own debt issues.  Just as the Federal government wants to kick the can to the next generation and the next, we too want to put off paying for things today.  Part of us hopes we can pay off our debt with inflated dollars.  The only problem is that in so many other places our inflated dollars are buying less and less.  This is why we must demand the painful fiscal medicine, even though it will not taste good, feel good, or be enjoyable.  We must demand it or we will die a slow and painful death from 14 trillion microscopic paper cuts.

Please note: I reserve the right to delete comments that are offensive or off-topic.

3 thoughts on “Stop Spending, Start Saving!

  1. Solving the deficit at this point is not really that complicated. For every line item in the budget, all the Congress and the President need to identify if it is in the top half or bottom half of their priorities. Spend the money on the top half, don’t spend the money on the bottom half. You now have an instant surplus you can use to pay down the debt (at least until the Social Security Trust Fund starts unwinding in a few years).

    Really, is this all that complicated? The most ignorant of middle school drop outs can comprehend this. You can even phase this in so every year you drop the bottom say 10% of priorities and we’d still avoid fiscal crisis (though it would take a few years to get to the operating surplus we need to pay off the boomer’s Social Security payments).

    Really, just stop spending on the government’s bottom priorities, make it a societal expectation that politicians actually name their bottom priorities and the intellectual work is done.

  2. I like that concept, along with the escalation each subsequent year. It just needs to apply to everything… discretionary and non-discretionary… and it needs to apply to off budget and on budget.

  3.  I would also suggest setting some sort of goals that you’re working toward. Saving for the sake of saving is a great overall concept, but many people can’t really conceptualize it unless they have an idea of what they’re working towards. Even saying ‘I’m going to put $100 towards savings this month’ gives you a tangible target to work toward. As you get into the groove, you can adjust as necessary, but it’s a good start.

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