I recently read this news story about the $17 Billion dollars that President Obama is seeking to cut out of the U.S. budget.  Here’s the link to the news story:

http://news.yahoo.com/s/nm/20090507/pl_nm/us_obama_budget

On the surface, $17 Billion seems like a huge amount of money.  The problem is that the government now is so ridiculously big that we’re dealing in the Trillions for our national budget, and these numbers just don’t “compute” in real-world terms.

To properly understand this $17 Billion “cut” in the budget, we need to draw an analogy with a typical American family budget:

Government Budget = $3.55 Trillion
Trying to “trim” the budget by = $17 Billion
$17 Billion is less than 0.5% of the budget!!

Average Family = $60,000  (an easy number for this example)
What is 0.5% of $60,000??  =  $300

Okay, so to put this in perspective, if you have an average family income of $60,000 you would need to cut roughly $300 from your ANNUAL budget.  Which further breaks down into $25/mo.  Could you find a way to save $25/mo?  I’m SURE you could.  Actually, in this difficult economy, how many of you have cut MUCH MORE than that already?  I know we have!  And I can almost guarantee that the average American family has far less “waste” or “unnecessary expenses” in their budget already.

C’mon government, you HAVE to do better than this.  I’d expect at least a 2%-5% cut if you REALLY had the desire for change!  I haven’t yet done much research, but I’ll bet the government is GROWING faster than 0.5% every year, which means this isn’t really a CUT is it?  No, its actually just a reduction in the amount of growth.

Let’s all show the government how its done!  Be frugal, be industrious, pay as little tax as you legally can, get out of debt, operate under a balanced budget and be giving.

One of my inspirations is Dave Ramsey.   I suggest those who don’t know Dave get acquainted with his ideas on money.  Principles I wish I had learned better awhile ago, but am happy to be following now.  If ONLY we could get the government to attend Dave’s “Financial Money Makeover!!”

Americans have watched over 2 Trillion dollars in retirement funds and savings disappear in the last few weeks.  Poof!  And what are the “experts” telling you now?

“Don’t worry.  It will recover.  Just stay in for the long haul.”

Well, unfortunately if you’ve already been investing in the stock market for years, there might not be any other good choices.  Taking out your money now means you’re locking in all those losses without any chance of recovery.  But its time to reflect a little on the current state of investing.

Does it really make sense to lock away your money for 20,30, even 40 years and hope that when it comes time to retire the market will be “up”?  What happens if you already are retired and your stocks drop 50% over night?  And just because we’ve had a long peace-time prosperity that has driven the market up overall… doesn’t necessarily mean it will do that in the forseable future.

We have a ticking triple-time bomb with Social Security, Medicare and stock-market retirement funds.  When the baby boom generation begins to withdraw their money instead of put it away… how can stocks NOT continue to drop.  What happens as life expectancy continues to go up, and Social Security benefits have to keep getting paid?

I could go on, but the point is that there is no safe investment for long-term retirement.    The only real investments you can make are in assets with intrinsic value:  real estate, precious metals, businesses that generate cashflow etc.  Invest in a business that generates cashflow, and invest in learning skills to make money at any age (mind money, not physical labor!)

Work at paying off all your debts, even your house, and reduce your cashflow requirements.  And above all else, take heart that we have a God who cares for us and says so in his scriptures.  That no matter what happens to us, he promises us life with him if we believe and accept his gift of salvation.