With all the news of "stimulus" and Congress spending money like there's no end in site I thought I'd give my two-cents worth on the subject.
The government's not much different than your home budget, minus about 30 zeros. The reality is someone will be responsible for the debt the government incurs at some point in the future. The government may never totally pay down all the national debt but there is a limit to how much money the government can borrow and here's why:
If you, the average citizen, spend $100,000 dollars a year and make $50,000 dollars a year you have a budget deficit of $50,000 dollars.
As long as you can manage the debt payment.....for the government interest on the national debt...you're ok.
But one day, you won't be able to afford to spend $50,000 more than you make. You won't find any banks to lend you money because they know the risk is to high of you defaulting on the debt.
Well, the government's been spending more than it takes in for decades. Yeah, there was one or two years in the 90's where the government ran a slight surplus. But that is chump change to what is coming down the road.
The current President is proposing spending close to a TRILLION dollars more than the government brings in for the next fiscal year. That's "T" for trillion dollars. I don't have my calculator handy but I doubt I could put that many zeros in it.
And that's the point. It's time to spend less than we make and the government needs to follow along with the average citizens of the U.S.
My point:
You can't borrow forever no matter if you are the government or an average citizen.
You'll go bankrupt. And so will the government!
David...
Saturday, March 21, 2009
Sunday, March 1, 2009
You can't Spend Your Way To Success
The government's been doing a lot of borrowing lately. The goal seems pretty clear. The government wants to spend its way to prosperity even if they don't have the money.
Let me tell you why this will not work.
Your personal home budget is much like the government only quite a bit smaller. The principles are the same. If you don't make enough to live on you either live on less or borrow more or work more.
If you borrow more money one day you'll have to pay it all back. Now, most of us can borrow more money than we can pay back because we view how much we owe by how much our monthly bills are.
If you borrow $10,000 dollars and only have to pay back $236. a month you'd probably say you can afford it. Well, you can't borrow forever because eventually your monthly bills will exceed your monthly income.
Though, you can borrow more than you can pay back for awhile. But eventually you won't be able to borrow anymore money.
The government is much the same. They've been spending more money than they take in every month now for years. The question is: How much can the government borrow before they cannot make the interest payments?
And once the government cannot make the interest payments how does the government function?
By raising taxes.
It is that simple. And, don't get hooked on this idea that the rich will pay more in taxes and every thing's gonna be alright.
The reality is there isn't enough rich people to pay the entire bill. The government will have to go after the middle class, and finally the poor class.
We're not going to escape it. Someone will have to pay up one day.
Until that day I encourage you to check out previous posts about how you can become debt free and totally free of the bondage debt has you in.
You can do it with anyone of a number of strategies I recommend.
Don't be like the government and spend, spend, spend. Take ownership in your life and become a Cash King NOW because cash talks....
David
Let me tell you why this will not work.
Your personal home budget is much like the government only quite a bit smaller. The principles are the same. If you don't make enough to live on you either live on less or borrow more or work more.
If you borrow more money one day you'll have to pay it all back. Now, most of us can borrow more money than we can pay back because we view how much we owe by how much our monthly bills are.
If you borrow $10,000 dollars and only have to pay back $236. a month you'd probably say you can afford it. Well, you can't borrow forever because eventually your monthly bills will exceed your monthly income.
Though, you can borrow more than you can pay back for awhile. But eventually you won't be able to borrow anymore money.
The government is much the same. They've been spending more money than they take in every month now for years. The question is: How much can the government borrow before they cannot make the interest payments?
And once the government cannot make the interest payments how does the government function?
By raising taxes.
It is that simple. And, don't get hooked on this idea that the rich will pay more in taxes and every thing's gonna be alright.
The reality is there isn't enough rich people to pay the entire bill. The government will have to go after the middle class, and finally the poor class.
We're not going to escape it. Someone will have to pay up one day.
Until that day I encourage you to check out previous posts about how you can become debt free and totally free of the bondage debt has you in.
You can do it with anyone of a number of strategies I recommend.
Don't be like the government and spend, spend, spend. Take ownership in your life and become a Cash King NOW because cash talks....
David
Saturday, February 14, 2009
I normally don't get into politics but...
If you've kept up with any of my posts this blog is about debt free living and you're probably wondering why I would talk politics.
It's simple. If you want to live debt free go back through the back issues. I especially encourage you to do the $5 dollar a day to total debt free living.
Anyway, the big fat so called stimulus bill is about to be signed and I have to comment.
First, I don't care if you are democrat, republican, independent, or nothing.
The comment is this: You cannot borrow your way to prosperity. It is that simple. YOU the average ordinary citizen can't do it, I can't do it, no body can do it. The more you borrow the more you have to pay back. It's that simple. By the way, the new bill about to be signed will carry an annual interest bill in the hundreds of billions of dollars.
My suggestion for 2009 is this: there isn't much you can do about the dummies in Washington but you can do something about yourself. Take my advice and get out of debt now. Washington's not going to bail you out. No one will.
Use my FREE strategies posted here and start breathing easier, living easier, and taking the load off you by getting out of debt.
To debt free living...
David...
It's simple. If you want to live debt free go back through the back issues. I especially encourage you to do the $5 dollar a day to total debt free living.
Anyway, the big fat so called stimulus bill is about to be signed and I have to comment.
First, I don't care if you are democrat, republican, independent, or nothing.
The comment is this: You cannot borrow your way to prosperity. It is that simple. YOU the average ordinary citizen can't do it, I can't do it, no body can do it. The more you borrow the more you have to pay back. It's that simple. By the way, the new bill about to be signed will carry an annual interest bill in the hundreds of billions of dollars.
My suggestion for 2009 is this: there isn't much you can do about the dummies in Washington but you can do something about yourself. Take my advice and get out of debt now. Washington's not going to bail you out. No one will.
Use my FREE strategies posted here and start breathing easier, living easier, and taking the load off you by getting out of debt.
To debt free living...
David...
Saturday, February 7, 2009
The government can't borrow its way out of trouble and either can you
The government has lost it's mind. I know, I know, the government is not a person. And here's the lesson in that. The people currently running the government have totally lost there mind.
For some reason they think it is possible to spend out of a recession. First, a recession or business cycle has been around since the dawn of time. They aren't going away and they aren't the end of the world either.
The reality is we will always have a business cycle. They will never go away. Typically recessions last anywhere from 6 months to 18 months.
MYTH NUMBER 1: a recession does not affect every sector of the economy.
REALITY NUMBER 1: there are always successful people succeeding during a recession
MYTH NUMBER 2: some companies are suffering because of the recession
REALITY NUMBER 2: most companies cannot do good in good times let alone bad times.
Just take a look at the airlines and car companies. The airlines are the worst. They manage to go bankrupt all the time good times or not. The car companies have already been having trouble. Now they have more trouble.
Despite what you might be hearing from politicians and reporters and pundits on the tv recessions come and go and this one will too. The bigger question is will we be better off or worse off if we try to borrow and spend billions maybe even trillions?
My guess is we'll be worse off because none of us can borrow our way out of trouble.
David
For some reason they think it is possible to spend out of a recession. First, a recession or business cycle has been around since the dawn of time. They aren't going away and they aren't the end of the world either.
The reality is we will always have a business cycle. They will never go away. Typically recessions last anywhere from 6 months to 18 months.
MYTH NUMBER 1: a recession does not affect every sector of the economy.
REALITY NUMBER 1: there are always successful people succeeding during a recession
MYTH NUMBER 2: some companies are suffering because of the recession
REALITY NUMBER 2: most companies cannot do good in good times let alone bad times.
Just take a look at the airlines and car companies. The airlines are the worst. They manage to go bankrupt all the time good times or not. The car companies have already been having trouble. Now they have more trouble.
Despite what you might be hearing from politicians and reporters and pundits on the tv recessions come and go and this one will too. The bigger question is will we be better off or worse off if we try to borrow and spend billions maybe even trillions?
My guess is we'll be worse off because none of us can borrow our way out of trouble.
David
Saturday, January 31, 2009
The US cannot keep borrowing just like you cannot keep...
No matter what's happening in Washington these days one thing is for certain. The government cannot keep borrowing money just like you cannot keep borrowing money.
At some point you've got to pay it back. And, if you are expecting the government to bail you out I've got some ocean front property to sell you in Yuma Arizona.
Ironically there are 3 steps to getting out of debt now and the first step is the most difficult.
Step 1: quit borrowing
Step 2: begin paying off debt
Step 3: operate cash only debt free
The reason the first step is the most difficult is because we have trained ourselves to use credit cards to pay for everything. There's a belief when we use credit cards we won't have to pay them back. Sometimes we even feel richer when we use credit cards.
Try this experiment. Take a $20 dollar bill and a credit card. Which one is more difficult to use when paying for an item? If you're like most the twenty dollar bill is the hardest to spend because we feel it immediately. The credit card, however, is easier because we don't seem to feel the pain when we spend it.
Once you get used to using cash instead of plastic you'll be 90% of the way towards debt free living.
You'll feel better once you begin to pay cash again for items, gas, food, and everything else. You'll even discover you spend less money because there is infinitely more pain when spending real dollars.
Begin today to get out of debt and live debt free. It all begins with the elimination of plastic and a cash is king mindset.
To Debt Free Living
David
At some point you've got to pay it back. And, if you are expecting the government to bail you out I've got some ocean front property to sell you in Yuma Arizona.
Ironically there are 3 steps to getting out of debt now and the first step is the most difficult.
Step 1: quit borrowing
Step 2: begin paying off debt
Step 3: operate cash only debt free
The reason the first step is the most difficult is because we have trained ourselves to use credit cards to pay for everything. There's a belief when we use credit cards we won't have to pay them back. Sometimes we even feel richer when we use credit cards.
Try this experiment. Take a $20 dollar bill and a credit card. Which one is more difficult to use when paying for an item? If you're like most the twenty dollar bill is the hardest to spend because we feel it immediately. The credit card, however, is easier because we don't seem to feel the pain when we spend it.
Once you get used to using cash instead of plastic you'll be 90% of the way towards debt free living.
You'll feel better once you begin to pay cash again for items, gas, food, and everything else. You'll even discover you spend less money because there is infinitely more pain when spending real dollars.
Begin today to get out of debt and live debt free. It all begins with the elimination of plastic and a cash is king mindset.
To Debt Free Living
David
Saturday, January 17, 2009
Don't Count On A Bail-Out For YOU
Recently, the news has been full of "doom & gloom". Well, actually, it is always full of doom and gloom. But this time things are a little different. With a new President coming in no is to sure of what's going to happen.
Get your house in order!
I've talked about this a lot (see my posts on living debt free and how to get there). If you want to live like no one else can live than you've got to live like no one else will live.
Don't count on the Government bailing you out. They've got so many problems right now they're totally lost.
If you want peace of mind and to live a healthier life make this the year you live debt free. You'll do what hardly anyone wants to do and be able to live like hardly anyone wants too.
David Dassow
Get your house in order!
I've talked about this a lot (see my posts on living debt free and how to get there). If you want to live like no one else can live than you've got to live like no one else will live.
Don't count on the Government bailing you out. They've got so many problems right now they're totally lost.
If you want peace of mind and to live a healthier life make this the year you live debt free. You'll do what hardly anyone wants to do and be able to live like hardly anyone wants too.
David Dassow
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