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Stop spending on things we can't afford

Full Speed to Port!

Posted: April 2, 2008 2:19 a.m.
Updated: June 3, 2008 5:02 a.m.
 

"...And I guess I lost my way
There were oh so many roads
I was living to run and running to live
Never worried about paying or even how much I owed..."
-- Bob Seger, "Against the Wind"

We got quite a scare two weeks back when, for a moment, it seemed that Wall Street might be going the way of 1929. Panic struck as Bear Sterns collapsed with Shearson Lehman close behind. Only quick intercession by the Fed halted an American transcontinental train wreck, and for today at least, we're tentatively back on the tracks.

And yet, despite the storied rescue, fundamentals in America's economy and national budget remain highly troubled; filled with potential for disaster and prolonged pain for the citizenry. We've been exposed as a nation that's for the better part of a decade lived beyond its means on easy credit and now the bill has come due and our pockets have run empty, all far more quickly than we ever imagined.

If you've ever run short at the grocery store, you too well know the feeling. When you headed in, you had a grocery list with a certain amount of money to spend. But maybe you went in hungry and put too many goodies in your cart, or maybe prices were higher than expected.

At the checkout, the clerk rings up the bill and you're short cash to cover it all. Humiliated in front of lines of gawking and giggling shoppers, you pull cartons and cans off the counter, hurriedly balancing your purchases with your cash on hand.

If anything like this has happened to you, you know just how humbling adjusting to your budget can be.
There are tough choices in what to leave in and what to leave out. And the neighbors are watching while you squirm to make ends meet.

These days, money's tight all over America. It's tight for workers, and it's tight for the nation overall. I'm not sure whether our personal "borrow and spend" predilections affected our politicians' "borrow and blow" habits, or whether it's the inverse that's true. But whatever came first, the end result is we've got Matterhorns of debt piled up all around us -- the greatest being the $9.2 trillion engineered by the prodigal Bush administration and his Republican Congress. America's 2008 budget spends $410 billion more than we take in -- and that mind-boggling crater of debt doesn't even account for $100 billion or so "off the books" for war spending.

Something's got to give under all this debt, and what's giving is America's stature and standard of living. Had we been paying our way for this national excess with equivalently higher taxes, citizens would have long ago revolted, demanding cutbacks in the spurious luxuries of national ego. When you pay as you go you're careful about what goes in and out of your cart.

Instead, for the last seven years, President Bush overloaded our nation's shopping cart with mountains of Twinkies, making a mad dash to the parking lot -- hollering back to the checkout clerk, "Just put it on our kids' tab!" Republican snake charmers assure us, "Balanced budgets don't matter; we can spend all we want now and worry about it sometime and somewhere later." Well, that sometime is now, and that somewhere is the quivering on Wall Street and your declining dollar.

Have you noticed all the higher prices all around? A debased dollar is the late payment fee for having not lived within our national means.

When your or I run out of cash at the grocery checkout stand, the impact hits hard and fast: We pull unnecessary stuff out of our carts as fast as we can.

With the federal budget there's more flex -- but sooner or later, chickens come home to roost and the numbers must add up.

Those "chickens" now clamor and demand that we quickly match the contents of our national cart with the reality inside our nation's wallet. Yet, while the world gawks and giggles at profligate America, Bush keeps piling the Twinkies high in our cart.

Bush's 2008 budget spends $410 billion more than we take in on taxes. Astonishingly, Bush threw in an 8 percent Twinkie increase in military spending -- bringing the military bill to $600 billion for 2008 alone.

To offset that prideful indulgence, he's tossed out cases of Medicare, education and highway funds.

We're broke at the checkout line, but Bush buys cartons of cigarettes while holding back on milk and meat for our kids.

In the troubled times ahead, we've all got tough choices to make.

Most of us have lived at least somewhat beyond our means. So now we have to take the ego hit and reduce or eliminate spending on what we can't really afford. Appearances must give way to hard reality as we readjust our lifestyles to sustainable budgets.

It's a humbling process, but we've got to do it quickly -- as our creditors won't wait indefinitely while we fumble around with our wallets.

Meanwhile, under economic duress, America faces its own humbling cash crunch. America has its own hard choices as to "what to leave in, and what to leave out." That $3.2 trillion budget already includes $600 billion for interest payments. We can't borrow more just to keep up appearances of empire. Our budget must reflect our core priorities and our actual ability to pay for them.

It's crunch time at the nation's checkout stand.

Guns or education. International adventurism versus national investment.

Real necessities or national ego. Our pride is on the line -- while the world watches what we put in and take out of our cart.

Let's hope we make wholesome purchases over the Twinkies we've been forced to purchase for the past seven years. Chose right, and our credit gets stronger. Chose wrong, and we'll be kiting our checks for Twinkies -- while our credit and dollars become worthless at the world's markets.

Balancing budgets is hard and humbling. But at least once its done, there's peace of mind and security for the future. This is as true for our nation as it is for us personally.

Gary Horton lives in Valencia. His column reflects his own views and not necessarily those of The Signal.

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