Fundamental Financial Principles Our Government Needs to Adopt

I believe in being informed about the political issues of the day and to that end I constantly scour the television political shows; I peruse the Web and read articles on CNN, FoxNews, GoogleNews and others. I listen to talk radio too. I’ve spent most of the day listening to talk radio while working on my wedding favors and wedding decorations websites. The debt this country is accruing due to short sighted politicians is infuriating. I am forced to constantly ask myself: Do they even have the slightest clue on how to manage money? I do. I have proven in real life situations the financial principles that should be used but of course, I’m not in a position to enact legislative change. Before I give those principles, though, first some context.

It’s plain to see that talk show icons Rush Limbaugh and Sean Hannity despise President Obama’s unequaled government spending. I despise it too, although I don’t consider myself a hard-core right winger. I consider myself a Reagan Conservative and an excommunicated Republican.

What’s happened to this country? Will our federal government ever learn how to manage money? Will this spending ever stop? Will our government ever learn the essentials of money management? Quite honestly, I doubt it. The genius of our American system of government is also is its greatest weaknesses — checks and balances. If Reagan had the line-item veto during his eight years as president, I’m positive the national debt, which had its ascendance during his term might never have started. It’s an “inconvenient truth” for Democrats but Reagan’s tax cuts and business deregulation worked. The government became flush with cash and the liberal Democrats who controlled Congress went on a spending spree, which is one of the reasons Reagan lobbied for the line-item veto to forestall “riders” that are routinely added to budgets by pork-loving legislators.

The Democrats aren’t the only ones to blame, though. Deficit spending continued under Bush 1.0 partly causing a recession that Bill Clinton, a supposed far left liberal, inherited in January 1993. To his credit Clinton stayed out of the burgeoning economy’s way and even paid down some of the $4.7 trillion national debt to $4.3. With Bush 2.0′s inauguration, though, any fiscal responsibility went out the window. Upon his leaving office, the national debt ballooned past $10 trillion dollars, an astonishing failure of fiscal responsibility. In a speech recorded on C-Span, I personally heard Bush refer to himself as a “fiscal Conservative.” My jaw dropped. For George W. Bush to refer to himself as a fiscal Conservative is like Hugh Hefner referring to himself as a 40-year old virgin. Bush’s profligate spending and other astonishing mismanagement infuriated Reagan Conservatives like myself and I left the party in disgust in early 2004.

Now, Obama is far eclipsing any spending Bush 2.0 adopted. As a socialist Liberal, Obama believes government is the panacea to every societal ill and is living up to his promise to Joe the Plumber that wealth distribution is the goal. It’s nauseating.

Both parties are to blame for this national debt and deficit spending. The American people too. There are too many Americans who expect free healthcare and welfare and have a “dependency paradigm.” Democrats are aware of this and play upon it. I suppose that is an article for another day.

I would like to see government utilize its resources wisely. From individuals to enterprise businesses to young married couples to large bureaucratic governments, the principles of money management are the same. Government can get away for a time with unchecked profligate spending as they have inherent “police power.” However, if you or I do that, we’ll experience very quickly severe financial pressure.

I am not wealthy but I have been able to sustain a certain degree of independence through the following of some very simple and straightforward financial principles. I was not born into wealth; I was anything but a patrician. From the age of 7½ to the age of 17½, I and my two sisters were supported by welfare due my mother’s distaste of work. I put myself through college working the early-morning shift at UPS and as a security guard. I also paid cash for my graduate school education and have paid for real estate investments and automobiles with cash, not debt. Again, I’m not rich but these principles work. Don’t let their seeming simplicity rob you of their power. I’m convinced if these principles would be sincerely adopted by our government and others, we wouldn’t have the severe recession the government and the economy is in right now.

Here are the principles:

**Live within your means. Spend less money than you have coming in

**Avoid debt the way you would the Ebola virus

**Learn to distinguish between needs and wants

**Only use a credit card as a financial tool of convenience. Pay the debt you contracted at the end of the month — never pay consumer debt

**Save for a rainy day

I don’t have a PH.d in economics nor do I need one for these principles if adopted will revolutionize your financial life. There are times when debt is necessary for the buying of a house or of a financing an education, but if you manage your resources well, you can minimize debt’s sting by living within your means — principle one. If you are in debt, I recommend you get out of debt as quick as you can — especially consumer debt. I use a credit card whenever I buy products. I do it as I build up points for my rewards awards program with my credit card, but I always pay the debt to zero when the bill becomes due. I use the credit card as a tool as I don’t like carrying cash around.

There you have it. These principles are powerful and if applied will help one get out of the financial mess they are in — including our country.