We are well into the government shutdown and there is just the normal back and forth that the American public has gotten used to. I am keeping with the theme of the government shutdown, because I think it is full of lessons. You can read my rant about the government shutdown along with how the shutdown is going to affect my investment decisions. This is going to be my last post about the government shutdown because I need to focus my time on things that I have control over (except when voting time comes around :)).
An Educational Lesson
I have seen some great articles around the personal finance space giving tips on what the latest government shutdown should teach you about your finances. There have been some showing you how you should be prepared for emergencies of all kinds. I think these are great tips. It doesn’t matter if the government is shutdown or not, they tips are great no matter what is going on. You should pay off your debt, increase your savings, save for retirement, and reduce your expenses. These are great tips for every day of the year, no matter what our government is doing. I think everyone can agree on that.
While the articles are good, I am not sure that a government shutdown should be a justification for a financial change on a personal level. I do think that any catalyst that gets you to change your financial habits is a good thing, I don’t like the government shutdown being that catalyst. Why?
What the Government Teaches Us About Finance
You may think that this is going to be a very detailed post about what our government really teaches us about finance. Well, in my opinion, this is what the government teaches us……
Yep, you read that correctly. I don’t think the government teaches us anything about finance. The main reason is that what happens in our government is no where near what really happens in everyday people’s lives. Their finances are not reality. The average American cannot handle their finances in any shape or form like the US government. It just can’t happen. You would be up shit’s creek without a paddle. Since I am an avid kayaker, I can tell you that not having a paddle is no position you want to find yourself.
Why the Government Can’t Teach Us Finance
I have a few reasons why we really can’t learn much from our US government with regard to our finances. Some of you might say we can learn a lot of what not to do, but I think the comparison is unrelated. No average American can compare their finances with the convoluted finances of the US government. There is just no point. So, here is my attempt to show you why we can’t learn anything finance related by the government.
- We Can’t Print Money – No matter how much we try, we just can’t print money, or at least not legally. No one has this ability except for the treasury. Unless you find the money tree, we will never just be able to go to the printer and get some more cash if we run out.
- Our Borrowing Power is Limited – The US government has some pretty good borrowing power. Much bigger than any average person or family. The average American can only borrow so much before we hit the wall. You can call it a debt limit, but we don’t have the ability to raise it when we want.
- It’s Harder to Increase Our Revenue – While you can certainly get another job, start a side business, or do something illegal, this is difficult compared to how the government can increase revenue. They can raise taxes, create new taxes, or change disbursements with just some votes. I would vote any day for more money in my pocket.
- We Can’t Run Without a Balanced Budget – It doesn’t matter how you do your budget. It could be complex or simple, but a budget is quite necessary. Most households cannot survive with a deficit and that is what happens when you don’t have a balanced budget. Our government has been running for quite a few years without one.
- Our Goals Are To Better Our Situation – Now, this might be controversial comment, but I have not seen much going on in the government that is dedicated to making the American public better. The problem with our government is that we have only two parties that are on two entirely different spectrums. They think and act completely different from each other. Your household budget wouldn’t work this way.
- We Don’t Support Lobbying – If you didn’t know that a majority of what happens in Washington is because of Lobbyists, then I am telling you now. Lobbyists have a lot of control because they bring the money. No average American household deals with lobbyists. You can’t say that your children are like lobbyists, because they don’t bribe you with money. They just throw tantrums. That is different. Our finances have to be built to better of lives, not to better the lives of someone else.
- We Can’t Be So Frivolous – Everyone knows that our government is not that good at controlling where the money goes. You probably remember the “pork” spending that would be included in bills. Our leaders would stick in unrelated spending for things that were important to them. We have seen the terrible Medicare fraud and how people take advantage of the welfare system. Average Americans cannot be so frivolous. We can’t lose that much money and not worry about it.
I could go on, but I think you get my drift here. While there might be some situations where the federal government can teach us about handling money, like spending more than you earn, I don’t think we should allow them to teach us anything.
When the US government can’t handle their money, we should not use them as a role model. No one should look at the US government and say “That is how I want to handle my finances!”, because that would just make me laugh. I would laugh and do it out loud. Our government has become a joke, a worldwide joke. I think time could be better spent trying to change circumstances that are within your control.
So, that is my last post about the government shutdown. I am going to take my own advice and work on things that I have control of. I will be using my one control when it is time to vote, but until then, I will focus on more pleasant things. Have a great weekend everyone!