How many posters operating wo balanced budget?

[formerexpat]

I keep hearing blame here of the tea party.

They largely wanted a balance budget amendment that was very unpopular with both of the major parties. Most people consider the face of the tea party to be Ron Paul, not any of these half baked politicians to which the liberal media wish to tie the tea party.

That got me wondering - In the last 10 years, how many posters here have operated without a balanced budget and spent more than you've received in income.

If you have operated at a deficit for at least one year:

1) When?
2) Why?
3) How did you resolve?

[❤ mollymouser ❤]

Would your definition of a balanced budget mean "debt free" ... or merely "able to pay all of my bills on time?"

[handyman2]

To me a balanced budget means that at the end of the month that I had not spent more than I could pay for. I use a credit card for 90% of my purchases. But at the end of the month I pay it all off in full. On top of that I other than my monthly purchases do not owe a dime to anyone and have a cash reserve for the unexpected. Now in all honesty it took me 20 years to get to that point starting out but with planning and persiverance We made it happen.

[gooddecisions]

I've always stayed within my annual budget even right out of college when I only made 22K/year. That said, I was just reading a Time Magazine article last week about why comparing your individual budget requirements to the government's doesn't work. It was an interesting piece. I wish I still had the magazine, but I tossed it. It was this article, but you have to be a subscriber to read the whole story: www.time.com/time/magazine/article/0,9171,2084563,00.html

[steff]

Yes there were times early on when hubby & I married & had kiddo that at times we just didn't have enough coming in for a unexpected bill/expense or we had a health emergency that would wipe out what little we had saved. And I had family to turn to for borrowing money. There have been times that my mom bought kiddo's school supplies & clothes because we didn't have quite enough to cover everything.

It has taken years and years for us to skrimp and save with one income. Slowly working our way up from where we started out to where we are now.... and yes at different points we've had help from family when needed.

[formerexpat]

That said, I was just reading a Time Magazine article last week about why comparing your individual budget requirements to the government's doesn't work.

Not surprised that a Keynesian came to this conclusion.

Continued stimulus to the economy do not and will not work because each one is billed to the country's credit card, provides temporary relief and any subsequent stimulus needs to increase to have a similar sized effect.

At some point, the recession will cycle through. The question is, how long will DC prolong that cycle from coming full circle and by the time it cycles, how painful will it be due to the intervention of government to prevent it?

BTW, here is the printed article: home.comcast.net/~wjbraith/balancedBudgetBlures.pdf

[AgeOfEnlightenmentSCP]

I don't think I've ever operated with a balanced budget. I've always spent more than I take in with the exception of a five to seven year period when I paid off all my personal debts-- but even then, I did that by growing my businesses and I operated those at a deficit. Mind you, a deficit doesn't mean that I can't cover the debt service- it means that I have actually spent more than I take in and then I have to put debt service in the budget.

Given that, I guess my answers are:

1) When? All but a few years.
2) Why? To acquire income producing assets, and/or assets that offer the opportunity for appreciation (real estate)
3) How did you resolve? I simply made sure I could cover the debt service and I have a long term (anywhere from 3 to 15 years) to pay down the debt on every asset acquired-- though I have, and I do not rule out re-financing them at a later date.

[formerexpat]

2) Why? To acquire income producing assets, and/or assets that offer the opportunity for appreciation (real estate)

Fair enough Paul - but I'm pretty sure the government is not doing this.

[fairlycrazy23]

Aug 8, 2011 23:04:29 GMT -5 formerexpat said:

That said, I was just reading a Time Magazine article last week about why comparing your individual budget requirements to the government's doesn't work.

Not surprised that a Keynesian came to this conclusion.

Continued stimulus to the economy do not and will not work because each one is billed to the country's credit card, provides temporary relief and any subsequent stimulus needs to increase to have a similar sized effect.

At some point, the recession will cycle through. The question is, how long will DC prolong that cycle from coming full circle and by the time it cycles, how painful will it be due to the intervention of government to prevent it?

BTW, here is the printed article: home.comcast.net/~wjbraith/balancedBudgetBlures.pdf

Yea comparing a household finance to government is not fair, because it falsely equates taxation to an honest living.

mises.org/daily/5304/Can-Governments-Finances-Be-Compared-to-a-Households

[gooddecisions]

"BTW, here is the printed article: home.comcast.net/~wjbraith/balancedBudgetBlures.pdf"

Yes, that is the one- thanks for posting

[Bluerobin]

We never used a budget. It is quite simple really. If you don't have the money, you don't spend it (don't run up the credit card unless you can pay it off when the bill comes).

[jkapp]

I've always lived within a budget and I have never paid interest on a credit card. However, my chosen career is accounting so budgeting is what I do.

Even as a kid, I never liked an empty wallet - I always had to keep at least a couple dollars in there.

[rockon]

A balanced budget simply means that you do not spend more then you take in but does not necessarily mean that you have no debt, just that your income allows you to make the necessary payments on that debt without borrowing more money. It's what every individual and business must do to avoid bankruptcy which makes it particularly difficult to understand any ones logic in thinking that our country can do something different.

[Deleted]

Aug 8, 2011 22:25:25 GMT -5 gooddecisions said:

I was just reading a Time Magazine article last week about why comparing your individual budget requirements to the government's doesn't work. www.time.com/time/magazine/article/0,9171,2084563,00.html

I agree with that statement. I think it is a false comparison to compare the budget of a sovereign nation to that of a company or person.

It is a better comparison when the country's money supply is on a gold standard (or something similar), but when it is simply a fiat currency you cannot make a comparison.

[rockon]

It really doesn't matter if there are differences or not. The fact remains if you spend more then your income you will eventually go broke and that applies to all.

[floridayankee]

Aug 9, 2011 8:37:13 GMT -5 ArchietheDragon said:

I agree with that statement. I think it is a false comparison to compare the budget of a sovereign nation to that of a company or person.

It is a better comparison when the country's money supply is on a gold standard (or something similar), but when it is simply a fiat currency you cannot make a comparison.

True...the US has a printing press and therefore can never truly go "broke". We, as individuals, don't have that luxury. But, the basic principal of "spend less than you take in" still applies. Sure, at times, you need to violate that basic principal, but when you violate it for 50+ years and counting, it's time to admit you have a problem.

[Deleted]

Aug 9, 2011 8:58:56 GMT -5 floridayankee said:

Aug 9, 2011 8:37:13 GMT -5 ArchietheDragon said:

I agree with that statement. I think it is a false comparison to compare the budget of a sovereign nation to that of a company or person.

It is a better comparison when the country's money supply is on a gold standard (or something similar), but when it is simply a fiat currency you cannot make a comparison.

True...the US has a printing press and therefore can never truly go "broke". We, as individuals, don't have that luxury. But, the basic principal of "spend less than you take in" still applies. Sure, at times, you need to violate that basic principal, but when you violate it for 50+ years and counting, it's time to admit you have a problem.

I agree. A fiat currency works solely based on confidence. Once you lose some of that confidence (when can happen after 50+ years of deficit spending) there is a problem.

[Deleted]

1) When?

The last 3.5 years.

2) Why?

DH wanted to go to school to get a degree, we had a child, and both of us developed health problems.

3) How did you resolve?

We've had a stream of income the entire time but it was not enough to cover our expenditures consistently. The deficit was taken from savings. DH is looking for a job now that he's graduated and is in the process of buying a portion of a business that will triple our passive income stream.

[ugonow]

I use my credit card when I do not have enough cash on me.I bet I am not the only one.

[ugonow]

After seeing the gridlock on raising the limit,can you imagine the gridlock on offsets if some quick cash was needed? I would pity those in disaster prone states.

[ugonow]

double post hiccup

[thyme4change]

Well - the year I bought the house I spent more than I earned.

This year I might spend more than I earn, because of the car and the remodel, etc. I took a loan for the car and I had money saved for the remodel.

And, of course, there are a whole bunch of years that I just went further and further into debt - just for the fun it brought me.

So, the question is - is our country's debt bringing us stability and future assets (like buying a house with a mortgage.)
Or is our country's debt spreading costs over the life-time (or partial life-time) benefit of the item bought (like buying a car with a low-interest loan.)
Or is our country just taking Visa to the bars and buying everyone a round?

[Deleted]

If you have operated at a deficit for at least one year: Not a hole year but it will probably become a year.

1) When? Last year & part of this year.
2) Why? Expensive care for our oldest dachshund.
3) How did you resolve? We cut spending on discretionary items.

[fairlycrazy23]

Remember that when you borrow money you are responsible for paying it back ,when the government borrows money future tax payers who did not vote for the borrowing are responsible.

[thyme4change]

Oh you say "future tax payers" like you think at some point someone will actually pay off all this debt. We haven't even paid off the New Deal. We are going to carry this debt until Jesus comes backs.

[fairlycrazy23]

Aug 9, 2011 12:23:54 GMT -5 thyme4change said:

Oh you say "future tax payers" like you think at some point someone will actually pay off all this debt. We haven't even paid off the New Deal. We are going to carry this debt until Jesus comes backs.

It has been wrong for a long time.

[BeenThere...DoneThat...]

If you have operated at a deficit for at least one year:

1) When? ...during school years...
2) Why? ...advanced education...
3) How did you resolve? ...terms paid as agreed...

[BeenThere...DoneThat...]

>>> So, the question is - is our country's debt bringing us stability and future assets (like buying a house with a mortgage.)
Or is our country's debt spreading costs over the life-time (or partial life-time) benefit of the item bought (like buying a car with a low-interest loan.)
Or is our country just taking Visa to the bars and buying everyone a round? <<<

...good questions, all...