Vasu Reddy From Chicago
The most important and most offered advice to humans is to be wise in spending and save for the future. Future refers to retirement and taking care of the needs of the children and family. As long as life has been recorded, the opinion offered to save for the future exists.
Some societies religiously practice savings and foster the environment for savings, and families continue the practice to plan for future. Some do exactly the opposite by simply spending whatever is available to them, cash, credit and whatever other form of resources that are available to them, and then spend rest of their life trying to make payments.
The philosophy of planned expenditure, saving for the future and spending within the constraints of available resources are all that are inseparable teachings to all of us. This refers to individuals and families and organizations and companies and governments and nations. Looking at the world very few (you can count with fingers) nations have balanced budgets and excess budget savings. As is true with individuals and families who have savings in excess of their needs. It’s true that large corporations and small companies that are cash positive and sometime cash rich, but they are supposed to be profitable for their shareholders, and that the primary intent of the business.
But the governments of the world; countries and states typically are run with deficits, and each year these are added to the cost of managing. In some cases the largest cost line in budgets are paying for the cost of borrowing; namely interest on borrowed money already spent. In case of the United States and my state of Illinois the interest cost is so large, the people who will look at the future will have to simply worry about two things; themselves first and the nation & state next. How will they ever satisfy the cost of already borrowed money, and what will happen to me?
What is quite revealing in the day to day affairs is that individual states, and even city governments can press for balancing the budgets and how the people who live in these localities can both contribute and benefit from the balanced budgets. In a recent visit to Pittsburgh we shopped a little, and there was no sales tax on clothes. If you live around the Chicago area it is close to 10% of the purchase for the same. There are probably other ways people get taxed in various states, but even a small drive from county to county will make a huge difference in how we get taxed.
In democratic societies, small countries such as Singapore and Hong Kong have somewhat flat tax rates for individuals and corporations and thus inviting investment into these countries. There are a number of small countries where the tax code is simple with a flat rate or no tax, but the consumers will pay for one rate for consumption. There is probably not one single plan that is custom designed for all countries that will eliminate the taxation issues, but there has to be a plan for everyone on earnings and spending and somewhere in there saving a little for future.
To ensure that we have a future, balancing the budgets and saving a little every day is essential. The governments that are formed through elections cater to voter banks and make allowances beyond the available resources. Also, there is abuse of power and money when large budgets are being handled, and a whole lot of waste that goes into big government.
While the public decries the spending cuts, they also should be forced to look at the cost of unplanned and unbudgeted spending. One can’t simply say that you take care of me now and I am not worried about what will happen to tomorrow. The decades long abuse of politics into budgeting and catering to voters has driven the states and countries to live off debt, and it’s time to buckle up and start cutting the fat and start saving for the future.
Mandating the balanced budgets might be politically suicidal for candidates, but elected governments can enforce these. Once the public sees the benefit of balanced budgets and no interest payments they will appreciate the value of spending money on things that matter rather than pay interest. Encourage more savings that will help foster a better plan for tomorrow. Simplify the tax code that will be easy to apply and follow. Move towards consumption and spending taxes rather than a very large tax code that no one appreciates or understands.
The governments can make sure that 100% of all spending is accounted for on all goods and services at the point of delivery and eliminate the loopholes in tax avoidance. There are so many simple ways to improve the prospects of money management by simple changes to the behavior of the consumers, and mandating the balanced budgets. The discussion on tactics to enforce 100% transparency and balanced budgets will be difficult to voter banks, but will be beneficial to the overall health of the population for generations to come.