National Debt and Personal Debt

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I’m back after a bit of a break working on my new book.

So what’s been going on since my last post?

“Averted” a catastrophe of the fiscal cliff.
Lined up the next catastrophe in the form of the Debt Ceiling increase

There have been some great comparisons between budgeting for families and the Government. You know the one’s I’m talking about where you remove a dozen or so zero’s from the National Debt and you’ll see a family debt.  How easy it should be to cut costs without having to increase revenue.  Typically seen on Facebook postings.

In one way, they’re pretty accurate.  Redundancies in agencies or departments obviously increase the cost side of the equation.  Removing or consolidating them would make sense, right?

I mean, do you have both DishTV and Cable? Unless you’ve got more money than you know what to do with, you probably have only one.  No one can say the Government has more money than they can spend.  And, no, I don’t think that allowing the Treasury to print more money is the correct answer.

That being said, I don’t think the deficit can be solved by just spending reductions.  Similar to how I (and many others) got out of debt, we had the need to generate extra revenue. Fortunately for my family, we were able to generate the extra income.  The government is going to need to take similar action if we expect to reduce the Debt. ($16,494,000,000,000) as of this writing. (Click here to see the real time clock).

And that’s where the tough part comes in.  It’s one thing for a family of 4 to say “You know, we have to cut down our expenses, so we’re going to switch to generic products.  And our Weekly dining out is now once a month.  We need to change our vacation to a STAY-cation.”

When the changes impact larger numbers of people, who have come to depend (rightly or not) on US Entitlement Programs, it’s an entirely different story.

I don’t claim to have ‘The Answer’ but I think we all know some of ‘The Problems’.

  1. Spending more than we earn
  2. Keeping commitments made decades ago
  3. Allowing partisan politics to keep us from working to resolve the deficit.

While the idea of switching cable companies recently saved us $50/month is great for us, that idea of small cuts to debt can be scaled to the National level.  We would be looking at needing to add 5 or 6 zero’s to the savings, but like the saying goes “A billion here, a billion there.. pretty soon you’re talking about real money”

What ideas do you have for debt reduction?  Share them in the comments both Personal and National ideas are welcome!

 

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