Budget Tips for the U.S. Government

By Fred Olsen, Co-Chair, Center for Family Responsibility

DAYTON- Lately, I have heard a lot about how the government is having trouble coming up with a budget that everyone can agree on. Even though the characters are different, the disagreements are very familiar to me, as I work with families having budget problems all the time at the Center for Family Responsibility, and through volunteer work at my church. All of my experience advising people on budget issues has made me aware of some of the common roadblocks to making a good budget that satisfies everyone’s needs. Whether dad wants a new lawnmower, mom wants a new ironing board, or Sally wants a new sundress, making a budget requires sacrifice by everyone. Today, I want to pass along some of the lessons that I have learned that can help make the budget as painless as possible.

1. Distinguish between Needs and Wants: The Government can save an awful lot of money by figuring out what it really needs, and what it just wants. I would tell the Democrats and Republicans to make a list of everything they will need to buy in the next year, then divide it up into two columns- one for Wants and one for Needs. Some expenses are necessities; the Government is going to have to budget for roads and schools no matter what. But, for example, the Republicans should ask themselves if they really need the Bush tax cuts. Could rich people live without a huge tax cut? That’s the kind of tough question the Government needs to be asking itself as it comes up with a budget.

[RIGHT- With irresponsible financial decisions like this one, it's no wonder the Government is having budget problems.]

2. Try before you Buy: Tell me if you have had this experience before: you see something in an advertisement on television and decide that you have to have it. You shell out your hard earned cash to buy it. It finally shows up on your doorstep, and after putting it together, it does little more than gather dust. Eventually, it gets relegated to a storage closet without ever living up to the money you paid for it. The Government faces this same problem. Take the F-22 Raptor twin-engine fighter jet, for example. For years, the Government wanted the F-22 Raptor worse than Ralphie Parker wanted a Red Ryder BB gun. It sunk billions of dollars into development of the air-to-air combat fighter, only to learn that it didn’t have a use for that technology after the end of the Cold War. If I was advising the Government at that point, I would have told them to try renting an F-22 Raptor, or maybe buying just one to see how it worked, rather than blowing a fortune on an entire fleet of planes that never get taken out of the hangar. The Government can save money in its budget by getting rid of things it doesn’t really need, and trying before you buy is a great way to test how necessary a purchase really is.

3. Little things add up: With a budget as big as the Government’s shaving even a few percentage points off the top can result in big savings. The Government should look into reducing interest payments on its debt by trying to get a home equity loan or line of credit to consolidate all of its debts in one place. I know the Government has had bad experiences with home equity loans in the past, but maybe it should shop around with some of the big lenders- like China, India, and Brazil- to see if any of them want to buy up all of the nation’s debt so the Government could make one, low monthly payment. Many people make similar mistakes with their banks. If you just assume that your banks fees are part of life, you might be missing out on better deals elsewhere. The Government should try to find a bank that offers totally free checking and offers the best possible interest rate. Even if the bank is just charging $20 per month in fees, that’s $240 every year, and it doesn’t take a mathematician to see that those numbers start to add up.

Even though the Democrats and the Republicans in the Government have had a hard time agreeing to a budget, I believe that by following these simple steps, they will be able to an agreement that pleases everyone. With a little bit of hard work and some “trimming the fat,” the Government should be able to avoid a messy conflict and finger-pointing that doesn’t help anyone.

Tales from the front lines

By Otto Stevenson

OMAHA- As it does every year, April has rolled around once again. As the snow turns to slush and the first blossoms form on the trees, it’s natural for a man to feel reinvigorated- excited about the prospects of a new summer.

But not me. See, for me, April stands for something altogether different. Something more depressing, more sinister. That’s because I’m a veteran; a veteran of the JC Penney Semi-Annual Sale. I have seen a lot in my seventy-two years on this big blue marble, but let me tell you that I have never seen something so decrepit, so depraved as the two-day sale that takes place every spring in that atrocity of a department store. The things I have experienced have made me question whether there is a God, but if there is, then there must be a hell, and that hell must look an awful lot like a JC Penney store after a Semi-Annual sale.

Every sale I have lived through has been a hive of pestilence, like a Biblical plague put on Earth to test the wills of men. Those who come out of it are scarred but hardened by the experience, and nothing will ever look quite the same to them again. Unfortunately, it’s no guarantee that anyone will come out alive. Lots of great young men have been taken in their primes by the JC Penney Semi-Annual Sale, all because they went along with their wives or girlfriends to keep them company, or just so they wouldn’t get yelled at later for staying home to watch baseball.

[RIGHT- A weary shopper gathers himself in the gardening section.]

One of the worst memories I have ever had came the night before the Semi-Annual Sale back in ’86. We were setting up an umbrella and some lawn chairs to sit in while we waited for the doors to open. My wife wanted to be in the front of the line because there were rumors of some great deals in the linen section and she didn’t want the good hand towels to be picked over by the time we got there. When we were setting up, it was still so dark out that we couldn’t see the other people waiting to get in, but we knew they were there. After a few minutes, we heard a crashing noise- apparently one of the bigger umbrellas had fallen down. Then, there was a sharp groan, like someone trying to catch his breath. The umbrella had fallen right on some poor sap who didn’t even see it coming. He laid on the ground moaning in pain for what seemed like hours. I thought about going to help him, but I knew it was too risky. Any movement would cause us to lose our place in line. Instead, we listened to him crying out in pain endlessly. He even started calling out for his mom. I thought that only happened in movies, but this was damn real. We all sat there listening to him wail on and on and couldn’t help but think, “why won’t you just die already? We need to get some rest before this sale!” After the sale was over, we saw it on the news. Chester Smith had been hit in the head with an umbrella pole and bled out in the parking lot to JC Penney. He was one of my best friends. You can’t imagine what it feels like to wish for one of you best friends to die. Let me tell you, it’s the pits.

As gruesome as that scene was, there are also images that were burned into my memory inside the store. I remember one time, we went to look at jewelry with another couple. My friend Barney was with his wife Fran. We all knew that Barney didn’t see so good. As we got close to the jewelry display, Barney said that he thought we should stay away until later. We all knew that he had poor vision, so Fran and my wife went ahead anyway. Sure enough, as soon as they got there, a pushy little Italian woman got mad because she thought they were trying to cut in line and steal the hoop earrings she was trying to buy. The woman lunged at my wife and inadvertently hit Fran square in the jaw with her elbow. Fran bit her tongue so badly that it bled. Medics and store security were called and they hauled the woman off, but that picture of Fran bleeding on the cheap department store carpeting will haunt me for the rest of my years.

Now we all like to think of ourselves as moral people, and we like to believe that we would do the right thing when faced with a difficult choice. The JC Penney Semi-Annual Sale is a test of our moral righteousness like none other. We all know what it feels like to have someone jump in front of you in the checkout line or to push past you to get the last pair of Dockers with a normal human in-seam. But we like to believe that we would not behave like savages when put in the same situation. Sadly, I have seen my wife sneak into a fitting room when someone was modeling skirts to her friend and steal the one that she wanted. If you ask her, she will deny that this ever happened. I wouldn’t even believe that it happened if you told me, but I saw it with my own two eyes.

As I have grown older, I have spent a lot of time thinking about sales and the human condition. Can there be such thing as a “good sale?” I say no, there is no such thing as a good sale. There can be a “necessary sale,” like when a store overstocked its winter apparel and needs to clear space for the new line of Tommy Bahama shirts. There can even be such a thing as a “just sale,” when you need new silverware and it is marked down 75%. But a good sale? I guess you’re talking to the wrong guy.