Monday, July 18, 2011

Cut, Cap and Balance

I woke up this morning listening to the radio. All the talking heads going on and on about the debt ceiling and the government possibly shutting down. Now that is one heck of a thing to have to wake up to every morning.  I live within my means (and trust me they aren't all that meaningful) and I pay my bills. I don't rack up debt that I have no way of paying back and I think the government should be able to do the same.  I don't think they  have a clue as how to cut, cap and balance the national budget. Wishful thinking after all these years of abuse and overspending.  And yet they will tell us that we need to live within our means. The problem is that many Americans can't do it either.

It seems that these days there is no example with which to draw from. Our grandparent's knew the value of a dollar and did their best not to incur debt that couldn't be repaid in a timely fashion. But that was the old way.  The new way seems to be to spend without regard as to how the hell you are going to be able to pay it back.  Defaulting on loans isn't just for the government these days. Folks are loosing everything they have every day, and mostly because they didn't live within their means.

Most folks under a certain "age"  grew up in families who owed debts that they were (and still are) struggling to get out from under.  The "prosperity" of people in general from the late 80's and even today has people thinking that it is just a natural part of living. Talk about entitlements....
For many years now it seems that the "American Dream" has been about buying a big house, having a couple of new cars, getting that boat you always wanted, nice vacations a couple of times a year, the latest styles in clothing,  the ski-doo's, the ATV's, the big screen TV, surround sound, and all the newest appliances.  If you don't have the cash just put it on the credit card and pay the interest every month. Even the kids feel that they are "entitled" to an education, cars, clothes, iPhones,video games, music and hefty allowance.
 We have taught it to our children and they in turn have taught it to theirs. Instant gratification has become a way of life and has been passed down to the next generation. Talk about entitlement!  I could go on and on about this but what difference would it make? Unless folks realize that they are not entitled to the fancy trappings that they feel they can't live without, the trend will continue. That is until they find that they can no longer maintain that lifestyle.  Or until the bank comes and takes their home, those credit cards are maxed out. and the collection agency hounds them until they can't breath anymore. 

More and more people are waking up these days and realizing that they are in a debt hole so deep that it may take years to dig out of it. There are no more inheritances to be had these days because folks owe someone for everything they have. Leaving an inheritance is impossible. For some, the only way out of debt is death. It doesn't have to be that way.

I would imagine it's a terrible thing to wake up one day and realize that your way of life can't be sustained anymore. That your credit cards are maxed out and you just may be one the millions who have lost or will loose their jobs. The fear of losing their homes and everything they have accumulated is very real for many today. For some it is to late and they are finding themselves homeless and living in their cars.  Of course the cars are on the repo list as well. 

 But people are waking up.  Some are finally realizing that they need to somehow crawl out of the hole and start to change not only their debt load but the way they do their day to day living.  I wish them lots and lots of luck because it most certainly isn't an easy thing to do. Waking up can be pretty painful when you first realize what you have done to yourself.
One of the first thing that will have to be done is to pay down the debts that have accumulated.  A major change in lifestyle will have to happen as well.  Living within your means isn't always easy. It takes a different mind set than the one you have had in the past. 
So what can be done to change that mind-set?  Well, I would say that the first thing would have to be knowing that things are going to have to change. That doing the same things over and over is insane and can't be sustained if you want to get out from under all that debt.
I am probably not the best person in the world to give advice as to how to do that. BUT even though I've never had credit cards I know that you have to stop just paying down the interest and stop incurring more debt on them.  Pay them off. If you have to do that one card at a time then do it.
No more spending money on things that aren't necessary.  That means that you don't need a new pair of shoes to go out to dinner next week.  It means not going out to dinner at all and wearing one of the pairs of shoes already in your closet. Just an example, but I'm sure you understand what I mean.  Start living "within your means".  Look at your bills. Start paying them down. No one can do it all at once but little by little you CAN get them paid off. Get out of debt. Start working on it now.  Stop eating out, start cooking at home.  Actually, cooking from scratch isn't all that hard and takes no more time than opening up a box of Hamburger Helper.  Its just cheaper and better for you.  Do you eat lunch out most days?  Start taking your lunch to work.
Stop going to Starbucks and invest in a coffee maker and a thermos. Make sure all your food comes from your own kitchen and not from some fast food joint.  You would be totally amazed at how much money that alone will save you. These are only a few examples. I can think of a lot more.
Sit down and make a list of all the things you spend your money on every month. Make an accounting of where it all goes.  Become responsible for your actions and your debts. What are some of the things you can cut out of your life?  Cut them out! Use that money to pay down your debt.  There are so many other things that you can do to live a more simplified life and get you out from under all that debt you have been "entitled" with.  Take a look on the internet, there are thousands of articles on saving money and reducing your debt.  You just have to ''want" to do it. It's not easy and it won't happen fast, but if you will just try I am positive that many of you can do it.

Cut, Cap and Balance your own way to financial independence.  Stop the "entitlements" and own your personal freedom instead.
    ~~~~~~  Hey ... I'm Just Sayin' ... ~~~~~~~


  1. In WWII, was the country just smarter about money, or did we not yet have the line of credit we now have? We were asked to pull together as a country to pay for as much of the expense as we could, so there would be less borrowing. In 1943, the Lincoln Cent coin was made of steel because the copper was needed for the war effort and to make coins of copper would have cost more than 1 cent. We did the smart thing and used a different metal that year. Now, we have been stamping out billions of cent coins that cost us at least 2 cents each to make for several years. Common sense out the window, no end in sight.

  2. YOu bring up some great points and insights. I do think the government is able to cut, cap, and balance if they really wanted to. I believe that this economy we are in was manufactured intentionally by our government. In the less than three years Obama has been in office, the debt has increased from $10.6 trillion to $14.2 trillion, a $3.6 trillion increase in about 27 months. In other words, Obama is increasing the debt by $1.6 trillion per year, three times as fast as Bush. Obama said he wanted to radically transform America- into a Banana Republic.

    My parents built their house in the 50's. A five year loan of interest only payments,and a payoff at the end. Credit cards were paid off monthly, and big ticket items were purchased from savings. Shopping for clothes was a treat. Very specific, about twice a year. Even though my family was financially secure, we we frugal, ate meals at home and spent sparingly.

    I have to say in the early years of my marriage, we got caught up in keeping up with the Jones'. No more. Our life has changed considerably and for the better. I blogged the other day about sports, and now I need to write a follow up after my husband shared with me what coworkers have experienced with sports until you drop.

    You are right about a change in mind set. And it may mean a diversion of friends, lifestyle, priorities, and learning new things. Simpler is better

  3. Jimmy, you pose an interesting question. I personally think that we were just alot smarter with money then than most people are now. The value of common sense has indeed been lost on most folks these days.

    Well Rose, Obama DID promise hope and change. Unfortunately, the change that has been made has stripped us of many of our rights and the hope that I have now is to see him out of office before he destroys what is left of the USA.
    Keeping up with the Jones' has certainly brought more debt to families. I guess I just never cared for the Jones all that much! LOL ;-)

  4. Jimmycrackedcorn said:
    In WWII, was the country just smarter about money, or did we not yet have the line of credit we now have?

    No, the United States was on the Gold standard, and we had fewer physical dollars in circulation. Our currency was backed in fully by gold the American Government actually held in Fort Knox. We had wealth. The stock market crash of 1929 was a manipulated event designed to concentrate the wealth of a few and strip it from the masses. It worked.

    Jimmycrackedcorn said:
    We were asked to pull together as a country to pay for as much of the expense as we could, so there would be less borrowing. In 1943, the Lincoln Cent coin was made of steel because the copper was needed for the war effort and to make coins of copper would have cost more than 1 cent. We did the smart thing and used a different metal that year. Now, we have been stamping out billions of cent coins that cost us at least 2 cents each to make for several years. Common sense out the window, no end in sight.

    You should do a little more research. Our pennies are not made from copper and have not been since 1983. If you hold any pennies from prior to 1983, their metal value is .05 cents. Pennies minted after 1983 are copper washed zinc slugs. Don't believe me? Get a good set of metal shears and snip a 1984 or later penny in half. It is a very thin wash of copper covering a nice solid zinc core.
    The reason it costs .02 to make a penny? Inflation. There is more physical currency in circulation now than there has ever been in the history of America. The more there is of something, the less it is worth. Check the term Hyperinflation on your favorite search engine.

    Great post SciFiChick! Keep waking up the sheeple! Long live the Republic!

  5. Last winter I was fortunate to be able to teach a course on this subject. The people in the course were very surprised to learn just how badly off our country is due to the debt load. Great post, and it is really encouraging to see a few more getting their finances in order.
    Totally debt free in Canada, and working hard to stay that way!

  6. I tried to teach my kids that they were always rich if they lived within their means. If they could afford beanie weenies then that's what they would eat, not steak. The girls knew I wouldn't buy anything unless it had been marked down 3x-and it tickles me that they still follow that example. My parents used "lay away" -plastic didn't exist. I really do think that basic economic survival needs to be taught-how to keep a checkbook, how to budget to "save". As a parent and grandparent I feel it is my responsibility to teach these basics and not "give" my kids everything.

  7. Falcon, please don't put words into my mouth. :D The switch in mid-1982 to copper plated zinc coins was an unimportant part of my anecdote. The fact remains that--without regard to the (lack of) logic involved--our government's mint is spending 2 cents to make a coin they turn around and sell for 1 cent to the federal reserve. They make an overall coinage profit because it only costs them 8 or 9 cents to make a quarter, but they could make much more by dropping the penny completely. Thanks a bunch for sending me to Google Hyperinflation. You jump to conclusions without even trying to see the point of my comment.

  8. Sorry, JCC, I was not jumping to any conclusion, just answering statements. It is helpful to be exact in your details.

    The Mint does not sell the coin to the Federal Reserve Bank. The Federal Reserve Bank LOANS (with interest) the Department of the Treasury the right to coin that penny in exchange for Treasury Bonds in equal value to the amount of money to be created, plus interest.

    Without that "loan" from the Federal Reserve Bank, and according to the Federal Reserve Act of 1913, the United States Government does not have the right, power, or authority to coin or print currency. They must borrow that currency from the Federal Reserve Bank, again I cannot stress this enough, at interest, and the Fed gives the OK to the Treasury Department to make the money.

    So no matter WHAT denomination of coin we are talking about, or the basic cost it takes to make one, it is ALL too expensive because of the interest . Simple fact if the Federal Reserve Bank - which is about as Federal as Federal Express - loans our Government 1.00 FRN plus 10% interest (which is .10 per year compound) the Federal Government canb only make the 1.00 Federal Reserve Note. Where does the Government get the interest? They don't. Hence our mounting deficit.

    Our Congress lost their control over our currency almost 98 years ago.

    The "debt ceiling talks" are an absolute joke. The House schedules a charade vote simply to get themselves "on the record" as trying to restrain spending. Of course, it would never, ever get past the Senate and/or the Regime. But that doesn't matter. What does matter is giving "political cover" to the worthless, first-term republocrats who rode into office last year on a Tea Party wave. In the end, President O'bottom will raise the debt ceiling by Executive Order. What? You don't think he can do that? Hmmm...Google "War Powers Act" and get back to me. The Regime doesn't care about the Rule of Law or The Constitution. Never forget that, with socialists, the ends always justify the means. The real question you need to answer is: "When the debt ceiling is raised by $2T or so, from where will the federal government get their $2T"? Answer that and you'll have your answer as to why the precious metals are soaring to new highs.

    Sarcasm noted and returned. Please feel free to check Federal Reserve Act in your favorite search engine, then look up Keynesian Economics.

    Got preps?
    Prepare for the worst, pray for the best.

  9. OK Gentlemen, I'm sure we can agree to disagree here! Thank you both for being courteous. I appreciate it and truly see what you are both trying to say.

    IanH,Congrats on being debt free! What a wonderful feeling it is. And I just want to say thank you for helping others to try and do the same.

    Dannie,it is always good to hear that others are teaching their kids the value of a dollar. And I agree that we should be held responsible for teaching the younger generations to be responsible in this crazy "credit-laced" world.

  10. Oh you silly Citizens it is not that simple.We must set up panels to study this.We will need to raise your taxes to pay for these panels.It seems we also need to borrow several trillion from the Chinese to run on in the mean time.We are bringing in the IMF,UN,World Bank,NATO,Council on Foreign Relations,U.S Treasury officials,Members of the Banking community,Wall Street officials,and the UAW.We have informed Janet N. of your unAmerikan views on spending.

    Yours truly.

    Ben Bernanke

    Or maybe


  11. Great post. I wish we had gotten started a lot sooner than we did. We are no where near ready for the mess that's coming. We'll just have to do the best we can.

  12. Red Woman, All any of us can do is the best we can. We can't afford not to.

  13. Very good insight and such truth... We are thinking about rebuilding the motor in our 1989 Toyota truck - it has over 350,000 miles on it since we bought it new. Way cheaper to do that than buy another. It isn't about how it looks but only if we can get where we need to go...

  14. Thank you 2 Tramps and thanks so much for stopping by today.

  15. Obama is increasing the debt by $1.6 trillion per year, three times as fast as Bush.

    Actually Bush never even hit 500 billion in a single year.....most his years were less than 400 thanks to 9/11....

    as far as removing a penny from circulation...100 of those things make a buck, why would you give anyone the thought that rounding UP (cause they wont round down) is OK for sales?

    And as far as a balanced budget, and house smoke and mirrors......yeah the budget is far from being able to be balanced, but at least some of those "riding" the teas party wave....have ideas...but YOUR President Hussein and his Media make any real cuts impossible.....Pray for 01/20/2013, and beg for it to not be Obama bin Biden.........

    SciFi You should post a blog on the constitutional violation in Arkansas.....a city council trying to take away the first amendment right of the town.....

  16. Mongo-

    Rounding works both ways. After 5 or 10 purchases you would be statistically even.

    Are you already aghast that they are rounding your purchase total RIGHT NOW? They are. You buy gas that is priced with dollars, cents, and mils. Where is your mil coin? They round it off.

    Or if you live in Illinois and pay 6.25% sales tax. A purchase of $5.50 adds 34.375 cents sales tax. They are nice enough to drop the .375 cents and let you pay just 34 cents instead. Rounding. However, if you purchase something for $5.70, you owe them 35.625 cents in sales tax, and *sure enough* they round it up and you pay 36 cents. Where is the justice?

    It's right there in the math.