Welcome to the latest series at the wildly popular JosephSangl.com: “5 Things That Will Help Fix The Economy” In this series, I will be sharing some principles I believe will help fix the economy long term.
The economy has been stuck for some time. The words “Great Recession,” “Fiscal Cliff,” “Sequestration,” “Stagnant,” and “Jobless Recovery” have become common everyday language.
Number 3: Build substantial financial margin.
When an individual, organization, or government continually operates without a “margin of safety” financially, they are always are at risk of collapsing in the face of a financial emergency.
Over the past decade, the national debt of the United States has soared. The actual debt was:
- In 2000: $5,757,000,000,000
- In 2004: $7,097,000,000,000
- In 2008: $9,472,000,000,000
- Now: $16,614,000,000,000
This debt has increased in large part because the nation has been “against the wall” financially – with no real savings. Just like a person who has lost their job without having any saved money, the decision was made to “finance” the gap to keep everything running. However, just like a credit card has a spending limit, so does the nation.
Just as it is of first and foremost importance for an individual to build financial margin (even before attacking debt), it is vitally important that the nation build savings. Savings allows the nation to have “breathing room” that would allow for the conversations and dialogue that is very necessary to make the best and wisest decisions regarding income and outgo.
Here are ways that the United States could build margin:
- Pass a balanced budget that is REQUIRED to be followed. (This was part 2 of this series)
- Ensure that savings is included as an expense that is part of the balanced budget.
I would be more than happy to pay more taxes if the government’s leaders would commit to STOP incurring more debt, and my extra tax dollars would be utilized to build financial margin and to reduce debt. Anything to ensure that my children and grandchildren won’t be left bearing the huge financial burden of a bankrupt nation!
Read the entire series (available after 3/14/2013)