Thursday, July 14, 2011

Federal Economic Xs and Ys

I hate this "debt ceiling" debate that is going on right now. It's being conducted at such a high pitch that I cannot imagine that anyone can think straight. It's getting emotional and very partisan. Let's get simple--I'm a simple person--I like simple.

The government takes in X amount of revenue every, oh let's say every quarter--tax revenue, fees, interest from investments, sales of real estate, sales of other goods etc. etc.

The government spends Y number of dollars every quarter: Paychecks to employees and the military, maintenance of buildings, office costs, Medicare payments to health care providers, grants to states, etc. etc. etc.

How far apart are X and Y every quarter?

What can we do to make Y smaller? Can we make Y smaller without losing the essential functions (now, there's a question for another day--what are the "essential functions" of the Federal government?) of the Federal government and without causing the creation of yet another group of unemployed people?

Is there anything that we can do to make X bigger that will not create a disincentive for citizens to increase their personal income?

Until we stop running at a loss on a quarterly basis, we will never be able to really fix this--we'll have to keep increasing our "credit limit."

Y needs to be smaller and X needs to be bigger. Let's start there.


Bob G. said...

Funny thing about this...when I got my credit cards (only have TWO now), they "set a limit" for YOUR spending.
ANd you stay UNDER the limit (if you're intelligent).
Sounds great so far...

But, if you (over time) develop a GOOD credit rating, they INCREASE your limit (one of my cards has a $10K limit now).

That does not mean that you promptly GO OUT and spend TO that higher limit (or more)...simply because you CAN.

You live "within your means"...i.e. the ability to PAY OFF the balance (the sooner, the better, too).

To do anything else is folly...and VERY costly in the long(er) run.

I've seen people get in WAY over their heads...

Now, the government is doing likewise, but has no idea how to FIX it?

What a disconnect...the PEOPLE know better for the most part.
Should be simple enough for politicians to figure out.

All they have to do is ask the AVERAGE citizen that is NOT in debt.

Scares the crap outta me some days with these D.C. people.

Stay safe out there.

The Observer said...

Bob G:
Both sides are scaring the crap out of me--I don't think any of the geniuses in DC know how to fix this economy or this problem.

I don't have the answer either, but it's not my full time job to figure it out. All I have is the experience of the micro economics of my household and in observing my parents' business.

Thanks for commenting and keep cool this weekend!

the Observer

Anonymous said...

Both of you use common sense, which is nowhere to be found in DC.They are not worried about the American people. All they are worried about is getting reelected so that they can continue playing out this scam on us!!! This goes for both parties, they are ALL THE SAME