Get Email Updates
Demented Diary
Going Wodwo
Crochet Lady
Dan Gent
Sky Friday
Kindle Daily Deal
Email Me

Admin Password

Remember Me

2412567 Curiosities served
Share on Facebook

Balanced Budget
Previous Entry :: Next Entry

Read/Post Comments (4)

A balanced budget sounds so good, doesn't it? Pay out of pocket for everything, not being in debt. Good old-fashioned common sense, right?

Not. We ordinary people live on deficit financing, too, in case you haven't noticed. When we set up a mortgage to buy a house, when (usually) we make arrangements for car payments, we are financing our current arrangements to make it possible to live more fully now, extending payments into the future.

How many people pay for their cars out of pocket? A few, who have been able to save, definitely not the working poor.

How many pay for their house out of pocket? Only the very wealthy. We finance this big ticket item; it's called a mortgage.

Would you balance your household budget by refusing to feed your children? By denying health care to your family? By eliminating tv, new clothing, etc? No, of course not. We consider what we need to live on, we finance the big ticket items. Sometimes, with credit cards, we finance day-to-day items, as well.

So intuitively it may sound like a good idea to balance the budget, pay out of current revenut for every encumbrance, but in reality it doesn't work that way, and trying to set policy as if it did, is not realistic.

Read/Post Comments (4)

Previous Entry :: Next Entry

Back to Top

Powered by JournalScape © 2001-2010 JournalScape.com. All rights reserved.
All content rights reserved by the author.