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Is Government Working For You - Or Are You Working For Government?

The new Congress and President are hard-at-work trying to push through a new economic stimulus package. Our elected leaders are claim the stimulus package will cost $825 billion, but the Congressional Budget Office (CBO) - which is known for its accurate accounting - says that with interest costs, the package will actually cost $1.1 trillion.

To put the $825 billion into perspective, Glenn Beck suggested today that the government could give a $17,000 check to every American and the numbers would add up to the same amount of the new "stimulus" package.

We all know it - the government is not going to send any of "us" a $17,000 check in the mail. This stimulus is about helping political causes as opposed to helping the people who are suffering in a bad economy.

If the current stimulus package will cost us $17,000 each, then the TARP funds cost us the equivalent of $14,000, just a few months ago. Between the two stimulus packages, the government is spending at least $31,000 for every American in 2008-2009, and that number only accounts for the "emergency stimulus"; it does not even take into account the governments normal spending habits.

I don't know about you, but $31,000 is equal to more than half of what I earned last year.

If we believe in our leaders, we would be safe to assume that the government will not come to us to collect the full $31,000 they borrowed in our names. Instead, our leaders would have us believe that you and I will get a tax cut and "the rich" will pay all of that debt back to lenders. 95% of us will get a tax cut and the 5% who are rich will pay our tax bills for us. So every rich person will pay the tax bill for the 19 of us who are in the middle- and lower-income tax brackets.

If this is an accurate assessment of the cost of these two stimulus packages, then "the rich" will be responsible for an additional $589,000 each. If the rich are really those who make more than $250,000 per year, then I suspect that most of "the rich" people won't be able to pay off our debts for us. But what do I know... I am not a politician.

What Do I Know?

I will tell you what I do know. I do know that I cannot manage my own family's finances with the same fuzzy math that government uses to manage its money.

I know that if I only have $3500 per month to pay my bills with, then I only have $3500 per month to pay my bills with. I also know that if I can find a mortgage company to finance my next home purchase, at a monthly payment I can afford to make, then I can buy a home. I also know that if I can find a finance company, which will loan me the money to buy a car, I can buy a car on credit.

At every step in the process, I need to know that I can reliably make all of my payments; within the context of the money I will reliably earn every month.

When my income drops, I need to find something to cut from my monthly expenses. If I cannot afford something this month, then I will not be able to afford it next month either. Rather than to try to live beyond my means, I have to cut something from my monthly expenses, because in the end, I need to do what is best for my family.

If the cash shortfall is temporary, like when I need to pay the mechanic to fix my car, or my wife gets another speeding ticket, then I can look to a payday loan company to help me cover that short-term cash shortfall.

In my case, the cash advance or payday loan is cool to use, but only if I am using it to cover a smaller, unanticipated expense. On the other hand, if the cash shortfall is expected to last several months, like when I needed to pay out $1100 over several months to pay the transmission shop for the new transmission in my car, then I would never consider a payday loan. Instead, I would find something that I could do without for several months and then do without that item.

Why Is This A Difficult Concept For Politicians To Understand?

At all times, we do what we can to live within our means, If we need to borrow money, we only do so when we are reasonably sure that we can pay that money back. If we cannot afford to borrow the money, then we look for things in our budget that we can cut.

But our politicians will never do such things. Even cost-cutter Governor Arnold Schwarzenegger cannot seem to figure out how to stop spending money. Experts are now suggesting that the State of California is only collecting 60 cents on every dollar it spends! OMG... Where does it end?

So, California is looking for money to borrow, and the federal government is borrowing money and printing money so that they can spend well beyond their means as well. And why are the politicians still spending money like this? Because we are in dire economic circumstances!

You and I cannot borrow our way to prosperity, so why would the politicians believe that the U.S. Government could borrow its way to prosperity?

If you ask me, it is because our elected officials are just plain stupid. They have decided that you and I exist so that we can take care of the needs of the government, instead of the government existing to take care of our needs.

"The rich" are not going to be able to afford to take care of all of the costs or our government, so in the end, you and I will be paying out of our very limited budgets to take care of the financial needs of our government. They have stopped working for us - now, we work for them. We just don't know it yet.

Fred Vanhoosen writes about the payday loan / cash advance industry for www.fastcash4all.net/ Occasionally, he feels compelled to comment on the financial habits of our government.

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