"The president made these decisions like a family would sitting around the dinner table. It can't spend more money than it has ... It has to make some decisions about what is vital." - A senior White House official.
"Right now, there is a family sitting at their dining room table, looking over receipts and figuring out how they can cut a few extra dollars from their budget. ... That family is doing what Washington refuses to do: tighten their belt and make the tough decisions to live on what they have. Families don't answer their problems with more spending. But Washington does." - U.S. Rep. Jim Jordan, R-Ohio.
Who are these families? We can't be sure, but we know they turn up in political speeches all the time.
The word picture painted by politicians is one of a modest family sitting at the dinner table with a calculator and a sharp pencil doing the family bookkeeping for the week. Things are tough, so they might have to cut back on their hot cocoa budget to make sure income and expenses are in precise balance.
Perhaps families like that exist. But if they were all that common, we probably wouldn't be in the economic mess we are now.
For every family that decided to maintain a strictly balanced home budget, thousands more decided not to worry too much about that: "I know what let's do. Let's get an equity loan and buy a time share in a condo on the beach! Hey, nobody ever went broke buying real estate."
While some believe government should operate more like family budgeters, in many ways the two already are strikingly similar. For example, families love deficit spending.
Most families, at one time or another, have given a monthly pound of flesh to pay for a mortgage, car loans, college loans or hefty credit card bills - or all of the above.
And, just like Congress, if the need arises to cut back on spending, different parties in the family might have different ideas about which expenditures are necessary and which aren't. For example, one party might suggest slashing the shoe budget while another party might favor steep cuts in big-screen TVs and related recreational expenses.
Special interest groups might also come into play. Lobbyists for things such as computer games, more texting minutes, new jeans, skateboards and movie tickets also can exert a powerful influence on the family budget process.
Sometimes extraneous expenditures - or earmarks - can appear on credit card bills without the express consent of either party.
Those who point to families as exemplars of thrift and common-sense accounting often imply that cutting expenses is the only resort they have when the red ink gets neck deep. That's not so.
Families also can resort to revenue enhancements. The easiest and most satisfying way to enhance revenues is to inherit wealth.
Getting a raise also is a pleasant way to increase revenues.
But those aren't the only ways. For example, a second or third family member can get a job. Families also can buy lottery tickets, gamble at casinos and sell stuff on eBay to increase revenues.
But while maintaining a rough balance between income and outgo is important, forward-thinking families, like enlightened governments, also must think about investing in the future to achieve a higher quality of life down the road.
One investment many families make is helping to pay for a college education for their children. This increases the odds children someday will leave home.
Other families might invest in a low-risk portfolio of stocks and bonds, or in old baseball cards, commemorative plates, Beanie Babies and other things almost guaranteed to rise in value. Or they might start a rock band in hopes of getting their own TV show. The point is, they are planning for a better future, and government has to do the same thing.
It's not just a matter of cut, cut, cut. You can save a lot by cutting expenditures, but you'll also probably be driving around in a lousy car.
As for the families who spend all their time sitting around the dinner table figuring out their budgets - go outside, get some fresh air and a little exercise. Otherwise you're going to drop dead of a heart attack before you get to enjoy all the money you make off those vintage Beanie Babies.
ABOUT THE WRITER
James Werrell is opinion page editor for The Rock Hill Herald. He can be reached by e-mail, at jwerrell@heraldonline.com.
Read more: http://www.heraldonline.com/2011/02/18/2846041/look-to-families-for-budgeting.html#ixzz1EKoPfnc7
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