Budget-Busting

From My Perspective - - -

USA Today projected a financial reality in October, 2004 as it pertains to 2008. The authors, Dennis Cauchon and John Waggoner stated the following: “The long-term economic health of the United States is threatened by $53 trillion in government debts and liabilities that…come due…when baby boomers begin to retire. The ‘Greatest Generation’ and its baby-boom children have promised themselves benefits unprecedented in size and scope. Many leading economists say that even the world's most prosperous economy cannot fulfill these promises without a crushing increase in taxes — and perhaps not even then. A USA TODAY analysis found that the nation's hidden debt — Americans' obligation today as taxpayers — is more than five times the $9.5 trillion they owe on mortgages, car loans, credit cards and other personal debt. This hidden debt equals $473,456 per household, dwarfing the $84,454 each household owes in personal debt….”

This projection is frightening when one considers the Mortgage and Investment Meltdown occurring in the markets. Escalating Food and Fuel Costs are only the tip of the iceberg. Some banks are closing and people have been lined up to withdraw their funds. Uncertainty will always stir a measure of panic. There is an interesting presentation by Steve Scalici who is a Certified Financial Planner. He highlights some unexpected events of the past decade that result in economic uncertainty…

• 2000 -- Tech bubble bursts in March, 2000
• 2001 -- World Trade Center attacks on 9/11.
• 2002 -- Enron, Arthur Andersen, Tyco, Qwest, Global Crossing, ImClone, and Adelphia-- hiding debt and misrepresenting earnings
• 2003 -- War waged by the U.S. and Britain against Iraq begins; North Korea withdraws from treaty on the nonproliferation of nuclear weapons
• 2004 -- Spain rocked by terrorist attacks; UN Atomic Energy Agency tells Iran to stop enriching uranium
• 2005 -- Hurricane Katrina; Rising interest rates
• 2006 -- Political corruption scandals; Interest rates rise; Housing market starts to slump
• 2007 -- Housing market meltdown
• 2008 -- Credit crisis hits financial sector, oil prices drastically rise…

Steve Scalici goes on to state some principles of personal management that should see most people through the various crises that may arise…”. I have found that there are five basic principles that you can apply that work in any economic environment – (1) Spend Less Than You Earn; (2) Avoid The Use Of Debt; (3) Save Money For Provisional Purposes; (4) Set Long-Term Goals; and (5) Believe That God Owns It All. He also shares some basic Biblical Principles and Guidelines: Proverbs 6:6-8, “Go to the ant, you sluggard; consider its ways and be wise! It has no commander, no overseer or ruler, yet it stores its provisions in summer and gathers its food at harvest.” A basic truism is found in Proverbs 22:7, “The rich rule over the poor, and the borrower is servant to the lender.”

Many years ago, someone stated: “If your outgo exceeds your income, your upkeep will be your downfall.” One would be wise to follow the Biblical principles of stewardship. At the end of the day – if these principles are embraced and implemented – one should be able to identify with The Psalmist and echo his words in Psalm 37:25-29, I have been young, and now am old, yet I have not seen the righteous forsaken or his children begging for bread. He is ever lending generously, and his children become a blessing…For the Lord… will not forsake his saints. They are preserved forever…The righteous shall inherit the land and dwell upon it forever.” God is always faithful – He can and will do this for you.

Think about this with me - - -