The Path Back

I have not always been a good money manager. If it weren´t for my husband, who is good at money, and the radio advice of Dave Ramsey, I'd be far worse off than I am. But through hard work and discipline, I can say that the family funds are pretty healthy right now. Discipline is not pleasant; our culture preaches the value of immediate gratification, and credit cards make purchasing our "wants" now all too easy. Eventually, though, the day of reckoning will come, and the hard choices have to be made--and they will be even more painful since we have become used to living beyond our means.

If a household is spending more than it takes in, there are really only two choices: cut spending or increase income. Digging out of the financial hole will be quicker if you do both methods at once, but even with a second job, you're in for an austere time. Instead of eating steak, it will be Aldi's brand Chicken Noodle soup, with generic peanut butter on no-name bread. No eating out, no vacations, no new clothes, no luxuries until the bills are caught up.

With this in mind, I would remind our elected officials--who have been spending like teenagers with a new credit card, paid for by Daddy--that the bills will come due. Our national debt is disgraceful and dangerous to our security, and we must mend our ways. Unfortunately, this means cutting spending and/or increasing revenue. Since no one in Washington seems to grasp this concept and put forth a plan, here is mine:

Immediately chop the budget of all departments 10%, across the board. (Note that 10% is in today's budget, not the expected increase in the budget.) Each department head decides where the 10% comes from, whether to lay off employees, reduce salaries, or turn off the air conditioning.

Eliminate pension benefits for all federal employees under age 45. They will have the ability to use IRAs just like the rest of us. Pensions for those between 45-55 will be only 1/2 the current amount. Those over 55 will receive whatever pensions they have today.

No new federal programs--for anything--unless a federal program is eliminated, and the savings must meet or exceed the cost of the new program.

Every wage earner must pay federal income tax, with a new minimum tax rate of 5%. When all pay, fewer people will clamor for benefits paid for by others.

Every federal worker must contribute, out of pocket, to his/her own health insurance plan.

Pensions for congresspeople, and senators will be prorated, based on 20 years of service. Anything less gets a smaller pension--just like the rest of the working world. Their pensions will also be subject to the pension rule above: if you're under 45, you don't get one.

Forget "prevailing wage" rules. Contracts go to the lowest bidder, and if that means carpenters made $25/hour instead of $30, so be it. We can no longer afford "Cadillac" payouts.

This is obviously not a complete plan, but it is, at least, a start. As I tell my English students, it's easier to revise something that exists, so get something down on paper and go from there.