Wednesday, August 22, 2012

Simple economics

My family have been debt-free for a couple of years, now.  We paid off the car two years early, and we'd paid off the credit cards before that.  So: no debt.  Not even mortgage debt--that's also been paid in full.

Saved our butts when Odysseus quit the job as a loan shark manager of a payday lending place because he could hardly stand to look in the mirror after seeing the kind of people that type of place tends to suck in and financially ruin.  We're pretty sure that his former boss badmouthed him pretty badly when he was applying for new jobs, because it took nearly two years to find a part-time pizza delivery job. 

During that time, we scraped by on my income, mostly.  Right around $10,000 per year.  Three months (one January and two Augusts) we had absolutely zero income because of the way the university has structured the pay schedule in the Spring and Fall semesters. 

We did it by having zero debt, and a very tight budget.  We have eaten out maybe a dozen times in two years.  We spent as close to what we were bringing in as it was possible to spend (some bills are totally unavoidable--and are creeping up), and leaning heavily on our savings in the meantime. 

And we watched our savings spiral down, because it is possible for a single person to live on $10 grand per year, but it's not, not really, for a family of four.  Not with the costs our government levies on us. 

Those costs are going up.  Not slowly, either.  The highest electricity bill during the summer of the year before the big zero got elected was about $170.  Now, they're topping $250.  The gas bill is much the same.  Gasoline has doubled.  We can't cut the cable because we need the internet for my job.  We can't drop our life insurance, or our health insurance--which, by the way, has tripled from what it cost when it was just covering Odysseus and me, and is shooting up by another forty dollars next month (thank you, Mr. President, for that).  It looks like our household costs will be going up next year, if the Bush Era tax cuts expire, by another two grand, on top of whatever the health insurance and utility bills are going to increase.

We're still spending as little as possible.  I'm working so hard on the writing because, while Odysseus is actually often making decent money delivering pizzas, we need that third income stream, no matter how small, to do more than just tread water. 

Our costs keep growing as a household.  Our income is pretty stable, so to remain within budget, our discretionary spending is shrinking.  It's not a hard concept. 

At least, not for a work from home mother of two.  It seems to be rocket surgery for those in Washington, D.C. 

Thanks to the huge levels of bureaucratic regulation, including union strangleholds on some industries aided and abetted by the federal government, combined with one of the highest corporate income tax rates in the world, industries are relocating away from the United States.  This is, in turn, creating a huge class of unemployed, who, by definition, are not paying taxes.  Between that and the lost revenue from industries fleeing the oppressive tax rates, our national income is starting to shrink.  They're trying to wring blood out of a stone by raising the rates to compensate, but that's just speeding the exodus. 

You'd think they'd cut discretionary spending, where they can.  That is, after all, how it works in household budgets.

Nope.  Obamacare is going to start bleeding money next year like nobody's business.  We're already several tens of trillions of dollars in debt, and they're still spending like they have money. 

As a nation, our costs shouldn't be growing as fast as the government is spending.  Our costs, as listed as the government's responsibility in the Constitution, are pretty small: infrastructure, and defense.  That's it.  No entitlement programs, no earmarks. 

Maybe we need a new amendment to the Constitution, one that puts the national budget in the hands of a housewife from a household that has no debt.

I can guarantee you that the United States would be put on a budget within a month, and our debts paid off within a decade.

No more of this kicking the debt shit onto our great-grandkids.  It's not right.

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