On Frugality

“A wise and frugal Government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned”. Thomas Jefferson (1743-1826), American Founding Father, principal author of the Declaration of Independence and 3rd U.S. President

The last few weeks Americans have watched the political hand-wringing over developing a budget to avoid a government shutdown. As both sides blamed the other, all of us ordinary folk scratched our heads in disbelief as those whom we elected to office acted like whiney children fighting over a few dollars. Our dollars.  Producing a budget is one of the Constitutional responsibilities our duly elected representatives are supposed to be doing, yet due to the other non-Constitutional priorities of the previous legislative session (like Obamacare and cap and trade) it failed to be accomplished last fall when it was due. The President has asked Congress to start acting like adults. Well, Mr. President, adults do not spend money they do not have, adults do not wait to create a realistic budget until halfway through the year, and adults to not waste time pointing fingers at everyone but themselves.

Both Democrats & Republicans have now, in the eleventh hour, agreed to a budget compromise that will fund the government through the fiscal year 2011 that ends in September. It shaves a paltry $38 billion off a budget of approximately $3.8 trillion, or about 1% (keep in mind this is a budget that still exceeds incoming tax revenues). To put it in perspective, that is like shaving $10 off a budget of $1000, a portion of which is already relying on borrowed money.  I don’t know about you, but if my family was in a financial bind, in debt up to our eyeballs, I think we would do a lot more than just cut our budget by $10.

The time has come for a return to frugality. Our federal government spends more in one day than what this budget compromise shaves in the next six months.  By the time you read this we will have already long blown threw it. Did you know that for every dollar our government currently spends, 40 cents of it is borrowed, and that percentage grows every year? How far would you be able to go if you did your own family budget that way? Unlike the government, taxpayers do not have the ability to tax other people or print money in order to meet their financial obligations. We want the government to live within its means, and we are ready to do without services in order to get there. We have done it before in times of crisis, and we will do it again. And unlike what the cynical bureaucrats in government believe, Americans are quite willing and able to help each other without their “assistance”.

We have dug our country into a debt hole so deep that we can see China (pun intended). This did not begin under the Obama administration; the ballooning scope and size of government has happened under the watch of both parties. Yes, we can always increase taxes, but that will just make things worse, as no country has ever become prosperous doing that. Americans rightly believe that all the money they work hard to earn is theirs to begin with, and we certainly are not keen on entrusting it to an entity that has already proven itself to be a poor steward.  Government spending is not an “investment”; taxpayers will never see a return on their money, let alone a profit. How long do you think a Wall Street firm would last if they followed this same “investment” strategy?

Frugality is not a bad word – it is a trait that has made our country prosperous in the past. Frugality filters out needs vs. wants.  And despite political accusations to the contrary, frugality is not selfishness. The more money Americans have in their pockets, and the less debt on the books, the more we will be truly free to help our neighbor. I believe that ordinary Americans entrusted with their own funds are far better equipped to discern the difference between those who actually need help vs. those who just need a kick in the butt.

A frugal government means a smaller government. A smaller government means a more accountable and transparent government. A more accountable and transparent government means a less wasteful and more efficient government. So, as you work on your taxes this week, reflect on this: does the government have enough of your money yet, or could they use a lesson on frugality?

“We need to understand the more government spends, the more freedom is lost…Instead of simply debating spending levels, we ought to be debating whether the departments, agencies, and programs funded by the budget should exist at all.” Ron Paul (b. 1935), physician and U.S. Congressman from Texas

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