Category Archives: Financial Planning

Government Deficits: Death by a Thousand No-Cuts

Living within a budget is simple:  First, determine your income realistically and accurately.  Second, make a thorough and honest list of expenses that does not exceed your income.  However, problems can arise at both the first and second stages of the process.  For example, what if your income is unpredictable or subject to fluctuations beyond your control?  What if you have unforeseen expenses?  Preparing for such problems is possible.  You can start by estimating your income using different scenarios—e.g., best, medium, and worst-case scenario planning.  You can prioritize your expenses and limit or rule out unnecessary spending.  And there is always saving for a rainy day.  In the real world living within a budget is not only simple; it is a necessity.

In a recent post Jack Cafferty asks, “Why won’t Congress and the President get serious about America’s debt crisis?”  In his blog he identifies a number of government hiring freezes and programs that are not receiving funding because of the ongoing budget problems facing the federal government.  In other words, not only are current funding requirements being ignored by the budget fiasco, but the likely outcome is that both Republican and Democratic lawmakers in the White House and Congress will adopt a federal budget that does not come remotely close to balancing the budget any time soon.  Every year the budget runs at a deficit—the government spends more money than it brings in—the overall debt of the national government grows accordingly.  What many people do not understand is that the national debt is like the “BIG ONE;” the predictable mega-quake that will shatter the west coast like a plate falling on the floor.  It doesn’t just happen all at once.  It is being prepared as you read this, by all the little stresses and strains that occur every day off our radar.  Every day the government borrows money it does not have to pay for programs it can’t afford it is forced to pay off debt using money that could have been used for something else.  It cannot go on forever.  “Jack!”  The answer is simple.  Congress and the President don’t expect to be there when the quake finally comes.  Unfortunately, millions of Americans are there now, and their homes and their businesses are crumbling around them as you read this. 

What do you think about deficit spending?  Is there more people can do to help solve this problem?  Who should be held responsible for the economic mess the federal government is in?

Congress, Mr. President:  Read the first paragraph to this blog please.



Daily Show: I Like Big Cuts

Is either party serious about cutting the deficit and reducing the national debt?

Vodpod videos no longer available.


What You Should Know About Deficit, Debt and Taxes

“It’s a mess!” says attorney Barbara Weltman. Uncertainty about Americans’ tax future reigns in Washington: Will Bush-era tax cuts be allowed by Congress to expire Jan. 1 or will they be extended? And if extended, how long and for whom? A meeting yesterday between the president and Republican leaders did little to clarify what taxpayers can expect in 2011. (12/1/10 ABC News, Alan Farnham) … Read Article

1. According to Clint Stretch, managing principal for tax policy at Deloitte Tax LLP, what is the dilemma for the middle class when it comes to dealing with the tax issues?

2. If the tax cuts expire what are the changes workers should expect, according to Barbara Weltman?

(Video)Banks Vs. Credit Unions: What’s the Difference?

The recent financial fiasco with big banks leaves consumers now having a second thought about doing business with banks. The Early Show’s financial contributor Vera Gibbons compares banks and credit unions. Would a credit union be a better alternative for you? (12/17/2009 CBSNewsOnline)

1. How would you determine which credit union to join. What are some specific signs to look for?

2. Compare bank and credit union rates for car loans and home loans as reported in the video. How do credit unions compare with banks in overall satisfaction rate?

Lincoln Electric Guarantees Employment

With unemployment hovering just under 10 percent, millions of Americans can only dream of having a guaranteed job.Wells, a tool and die maker, is one of thousands of employees at Cleveland’s Lincoln Electric, which promises that even in the worst of times, no one will be laid off. (7/17/10 ABC News, David Kerley and Felicia Biberica) … Read Article

1. According to Lincoln Electric CEO John Stropki, how is the company able to keep its commitment of guaranteed jobs to its employees , even during a recession?

2.  Discuss the lessons to be learned from Lincoln’s management philosophy.

Finally, Wall Street Reform: No More Bailouts?

President Obama today applauded the Senate for passing a sweeping overhaul of Wall Street regulations, and said he looks forward to signing it next week. “There will be no more taxpayer-funded bailouts – period.” (7/15/10 ABC News, Matthew Jaffe) … Read Article

1. Discuss Simon Johnson’s criticism of the financial reform bill.

2. Discuss the Republicans’ criticism of the financial reform bill.

Florida to Implement Class-Size Reduction

Come August, Florida will join 24 other states by fully adopting strict class-size requirements – and this at a time when many states are considering loosening such restrictions due to budget constraints. (6/17/10 ABC News On Campus, Vanessa de la Vina) … Read Article

1. Compare the results of the studies by Harvard University and University of Wisconsin of the effects of class-size reduction on education performance. Are smaller class sizes worth the cost.

2. “In response to schools’ struggles with funding, state legislators (in Florida) have floated a new amendment that would loosen the current class size restrictions.” Should Florida suspend its class-size reduction policy because of current funding problems? Why or why not?