Guess what? This year, 2012, is a big election year! For those of us who are political junkies, that’s a good thing.
We’re going to be watching and listening, with baited breath, every twist and turn in the campaigns of Messrs. Obama and Romney. Fun stuff!
One of the hot button issues, this year, is what to do about the Federal Debt. On one end of the spectrum, this is THE main issue that needs to be addressed by the Federal government. On the other end of the spectrum, the Federal Debt is no big deal.
Deciding which side you’re on is actually very simple. The key is to look at your own life.
Ask yourself these questions:
• Do you spend more money than you earn, each month?
• If you do spend more money than you earn each month, where does that extra money come from?
• If you continue to spend more money than you earn each month what is going to happen?
Now, let’s look at these questions and the answers more closely.
If you spend more money than you earn each month, then you are “deficit” spending. The same goes for our government. When you hear a politician speak of the deficit, they are talking about the money they are spending in excess of what they “earn”.
Note: applying the term “earn” to government revenue is a bit of a misnomer. The government doesn’t do anything to “earn” their receipts. More appropriate would be the term “take”.
Be aware that deficits are reoccurring and accumulate. For example, if you spend $100 more than you earn every month, you are running a (reoccurring) monthly deficit of $100. Notice the time element. The accumulation of deficits is called the total debt.
So, if you run a reoccurring monthly deficit of $100, at the end of a year, you will have a total debt of $1,200. The nasty thing about this is that once you start accumulating debt, you also begin to pay interest on that debt. That additional interest gets tacked onto your deficit AND your debt. Eventually, compounding takes over and the debt gets so large that the interest on it becomes greater than the original obligation.
This is exactly what is occurring on the Federal level. The deficit continues be added to the national debt. Interest on that debt is added to deficit …and in turn the debt. And the day is approaching where there won’t be enough rich people to tax to reverse it. We WILL end up like Greece.
So, the only question you need to answer is which party is raising the alarm and insisting that actions be taken to eliminate the deficit.
If you are dealing with your own personal deficit and debt problem, a great way to rectify it is to get going on your UnFranchise® business. Believe me, a $300 check every week goes along way to closing the gap!