All successful family budgets are inside out. Our legislators would do well to remember this simple economic truism. They can tax, cut, spend, and debate endless economic theories. They can clamber that this country ought to be run like a business. What they really need to do, though, is look at the country from a family budget perspective.
Think about it. When you sit down to do the family budget you don’t need hoards of economists, fancy spread sheets, or computerized accounting programs. A logical mind, a number two pencil and a legal pad will do just fine.
At the top of the sheet you write down how much income you have. Below that you work inside out on how to allocate that money.
The traditional trio of food, clothing, and shelter are at the top of the list. Money is put aside to buy groceries, clothe everyone, and pay the mortgage.
Next comes all the things a family really needs, things like: health care expenses, education for the kids, and transportation. Money is allocated to pay medical bills, buy school supplies, and make the car payment.
Now, after all the basics are taken care of, the inside, you begin to work toward the outside. If there is money left over after the basic needs are met, perhaps then you can start to think about cable television, taking the family out for a movie night, or buying a new sofa. These are things without which you could survive, but life with them would be more pleasant.
Finally, if there is still discretionary cash still available, you might do something like donate to a charity. It would make you feel magnanimous, but the key thing to remember is that all of your family’s basic needs are handled first and it’s not until that is rock solid that you give away what’s left over.
This is simplistic, but you get the idea of inside-out family budgeting. It takes some discipline, but it’s not that difficult.
Now, if you want to send your family into chaos and possible bankruptcy that’s a piece of cake. Don’t pay the mortgage and buy a boat instead; don’t put aside money for health care and take a cruise; don’t use the grocery money for food but gamble it away at a casino. In short, budget outside-in.
Now apply this same perspective to how our legislators spend your money. If they were budgeting like a family, inside out, the national budget would take care of its citizens’ basic needs first and work out from that. Al Neuharth, USA Today founder, recently wrote that his priorities for a national budget would be: Health, Education, Transportation, Military, Exploration. Basically, he went inside out.
By comparison, congress is all over the place. For example, this country spent $154 billion in Iraq and Afghanistan last year, but (at the federal level) only $77 billion on education. Our so-called leaders think nation building in Iraq and Afghanistan is twice as important than educating our own children.
If this country’s budget was inside out we would make sure that no child in the United States was hungry, no family would go bankrupt due to medical bills, and no senior citizen would have their heat turned off in the winter. Simply, we would take care of “us” first and the rest of the world would have to deal with it.
Tax break? Not until we’ve paid for those basics. Foreign aid? If we have money left over after every single basic necessity is met for our own citizens, then we would consider it. Disaster relief in your country? We would love to pitch in, but not until we’ve helped our own citizens recover from disasters in this country.
Al Neuharth ended another editorial with some sage words of wisdom (that should hold great weight as they come from a man with 87 years on his odometer). “While you thank your elected officials for extending the budget, it should be conditional on getting our spending priorities straight.”