Save For A Rainy Day
Dear Editor:
As a young boy I was taught the lesson to save for a rainy day. It was important to put a little aside on a regular schedule, so that when the surprises of life or when unforeseen problems or opportunities arise, I could be in a position to handle those times. Good lesson.
As a young, family man in the business world I was taught to face reality and plan for the future by having three months income set aside to handle unforeseen problems, like the possibility of being out of work for a period of time, or the chance of family emergencies. Living within one’s means was another good lesson.
As a corporate leader I knew the lesson of balancing a budget and planning for the ups and downs of business. A company has to have liquidity in order to operate and must learn to do business, whenever possible, within its own cash position, or with borrowings that can be paid back over a reasonable period of time. Banks and boards insist upon this. Another good lesson.
With these lessons and knowledge we look at the president and federal spending. The federal deficit in 2002 was $450 billion; in 2003, $984 billion; in 2004, $800 billion; and this year, the House has passed an increase of another $781 billion, on which the Senate has yet to act. That totals a stunning $3 trillion in additional debt in four years -- a 50 percent increase in the cumulative debt from all of America's previous history. In addition to this, future planning made no provision for the continuing costs of the war in Iraq, the Republican plan to end the estate tax and making all the Bush tax cuts permanent. It also did not realistically calculate the costs of the new Medicare prescription drug benefit, let alone his costs for privatizing a portion of Social Security.
And now our rainy day is here and in the first 10 days since Katrina hit, the president asked Congress for $62 billion, which is probably going to be just a drop in the bucket. Mr. Bush obviously doesn’t know his lessons, and we aren’t prepared financially. We'll do it, but at what cost?
As a young boy I was taught the lesson to save for a rainy day. It was important to put a little aside on a regular schedule, so that when the surprises of life or when unforeseen problems or opportunities arise, I could be in a position to handle those times. Good lesson.
As a young, family man in the business world I was taught to face reality and plan for the future by having three months income set aside to handle unforeseen problems, like the possibility of being out of work for a period of time, or the chance of family emergencies. Living within one’s means was another good lesson.
As a corporate leader I knew the lesson of balancing a budget and planning for the ups and downs of business. A company has to have liquidity in order to operate and must learn to do business, whenever possible, within its own cash position, or with borrowings that can be paid back over a reasonable period of time. Banks and boards insist upon this. Another good lesson.
With these lessons and knowledge we look at the president and federal spending. The federal deficit in 2002 was $450 billion; in 2003, $984 billion; in 2004, $800 billion; and this year, the House has passed an increase of another $781 billion, on which the Senate has yet to act. That totals a stunning $3 trillion in additional debt in four years -- a 50 percent increase in the cumulative debt from all of America's previous history. In addition to this, future planning made no provision for the continuing costs of the war in Iraq, the Republican plan to end the estate tax and making all the Bush tax cuts permanent. It also did not realistically calculate the costs of the new Medicare prescription drug benefit, let alone his costs for privatizing a portion of Social Security.
And now our rainy day is here and in the first 10 days since Katrina hit, the president asked Congress for $62 billion, which is probably going to be just a drop in the bucket. Mr. Bush obviously doesn’t know his lessons, and we aren’t prepared financially. We'll do it, but at what cost?
posted by Sam Schoolsky | 7:55 AM
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