The federal government does not have a budget. It has a spending authorization bill. A budget says, “We expect to receive X dollars of revenue.” If we do receive X dollars of revenue, here is how we plan to spend it. If we do not receive the expected amount of revenue, we will not spend as we planned. A budget must be “prioritized” in the event the expected amount of revenue is not received.
Each item on the budget is given a priority number, i.e. one, two, three, etc. lf the revenue received is less than expected the last priority item is reduced first. Each priority item may have a floor below which it will not be reduced. If the last priority item is reduced to that floor amount, the next higher priority is reduced. This procedure is continued up the priority list.
A budget does not allow for borrowing. It also does not allow for spending beyond the revenue received.
The federal government does not have the courage to live within a “budget” and therefore misnames its “spending authorization bill” to deceive the voting citizenry. There should be no government debt at any level.
It makes no difference whether you are an individual, a family, a business, a government or any other type of organization, you cannot borrow or spend your way out of financial troubles. At some point you must stop spending and start paying down your debt.
You may do that by increasing your income or reducing your spending.
If you have doubts about the above statements, pick up a shovel and start digging a hole with you at its center. Keep digging until you are over your head. Now continue digging, removing all dirt from the hole. As you descend deeper and deeper in the hole tell yourself that if you keep digging long enough you will be out of the hole. Before beginning your dig you may want to increase your life insurance and be sure your will is updated. Don’t neglect to tell those you care about goodbye.
If you do not understand this writing, ask a recent elementary school graduate to explain it to you.
Berton E. Card