Wednesday, November 24, 2010

Budget Deficit Spin Doctors

I just about fell out of my chair yesterday when I heard a Democratic pundit on TV say that "you cannot fix the deficit problem by cutting spending alone." Come again? As a Certified Financial Planner with a ton of number crunching experience, I find that statement to be totally false.

If I am spending $50,000 a year, but my cash flow from income is only $45,000 a year, then I can reduce my spending by $5,000 a year and solve my deficit problem. I didn't have to raise my income in order to do this which is the equivalent of the Democrats wanting to raise taxes.

This is as simple of a mathematical computation as it takes to solve a spending/deficit problem. The Democratic pundits on TV just do what they always do and that is mislead people into believing their spin on things.

Truth be told, you can reduce the deficit of this country by only reducing spending and not having to raise any taxes. Of course if you truly were to reduce spending in government, then this means that you would have to run it like a business and lay people off from their jobs. Or, better yet, take advice from a Certified Financial Planner and cut spending where you can. The problem is that the Democrats and some Republicans want to protect their turf. These people have never had to be on a budget. Why should they start now? Their thinking is to just stick it to the American people like they have always done.

Unfortunately for Democrats and Republicans alike, the American people are paying attention. In the past, nobody paid much attention to Congress, but now they have taken notice. If they simply raise taxes and do not cut spending, then the American people will do the cutting in terms of Congressmen in the next election.