Economical woes!

California cash to cover through June. According this Reuters article, California does have enough cash to cover it’s fiscal year, through June. However, in the article, they state that they already have massive budget short falls for the coming year. This is just one of the several things that I have been reading up on as far as fiscal responsibility goes. Also, compare this with a recent Frontline report (which can be viewed here). Now, the tone of the overall piece is very Anti-Bush, but if you look past that at the actual information, there is a very good hidden gem of knowledge, that of fiscal responsibility.

The basic information in the Frontline report is accurate. We had budget surpluses going into the Bush presidency. The, we ended up spending more in the last 8 years. Most of that is for entitlement programs. Entitlement programs (Social Security, Medicare, Medicaid, and now Perscription Drug benefits), are going to end up costing more than we generate. As the coming generation ages, they’ll end up using these benefits. I do think that the current estimates are based on the use of those entitlement programs for people who are already currently using them, ie those people in their 70’s and 80’s. I actually have faith that many of the people whom I know in their 50’s, family & friends etc., are really knowledgeable with their money, and have saved. I have a great amount of pride in the way that they’ve been so responsible, and don’t want to use these entitlement programs. I’ll talk about them in later posts.

The presidency under George W Bush spent more money, while taking in less, than most republican presidents. Now, I’m not one to point fingers and say it’s one person’s problem, more than another. Under Bill Clinton, corporations and other entities had some very “creative accounting”. The Enron scandal happened during the Clinton years and under his watch. However, we are spending more and more, and borrowing on credit. I don’t bust out the religious stuff here too often, but for years my religious leaders have been giving out one piece of advice, “Get out of debt”. When I look at the cost projections by what Frontline states, it hits home even more.

We, as American’s, have been spending more, and more, and more over the past couple of years. We are living outside our means. It’s absolutely absurd for a man to spend five thousand dollars on two utility vehicles, or a boat that they only use once or twice a year. A person shouldn’t need to take a trip to Brazil one year, and Africa the next. If you are going to dedicate that much to travel, you’re whole life should be based on that, at the sacrifice of everything else. Many people, from the past generations, only took a “trip” once every 5 years. Also, how many jobs have been created based on this practice? How many guys are working selling SUV’s, or boats, or working in Casinos, or the vacation industry? Because, automatically those jobs SHOULD shrink, because of how un-needed they are.

One thing I agree with Barrack Obama, on that we have problems and we need to pay to change them. I think back to the nature of equivalent exchange. To gain something, something of equal or greater value must be used. The nature and concept of credit, is an affront and abomination of this. We need to change the nature of our thinking. This means giving up some of our comforts for things in the long term.