A friend tells me he is sick and tired of living by a strict
budget. So, he’s decided to model his family’s budget on the
federal budget format.
He explained to me how simple the transition would be. First, he
develops a budget with line-items that cover the essentials —
mortgage payments, routine household expenses, car payments, real
estate taxes, college tuition, and so on.
But, the family’s real overall budget folds in additional
spending for the household equivalent of “earmarks,” those special
line items lobbied for by family members without which family
harmony would be a mere pipe dream. For example, his wife’s earmark
for a 10-day Caribbean cruise, the 2013 model SUV, and 30-foot
sailboat he wants to buy, and the kids’ demand for a premiere,
week-long visit to Disney World, as well as a dedicated, “kids
only” 42-inch flat screen TV for their playroom.
My friend knows full well that the family’s combined income
won’t come close to covering all the expenditures. And, he knows
that whatever raises and year-end bonus he might receive won’t
possibly cover the yawning deficit spending gap.
Sure, his wife works part-time, but her meager contribution to
the family income won’t be enough to keep their finances in the
black. Nonetheless, he is still confident that he can manage the
family’s bloated budget… with a little Washington-style
gimmickry.
So, every year he rolls out what he calls the Family Budget
Sequester Plan, deep, automatic, across-the-board cuts in
discretionary spending. These cuts can’t be avoided. All
discretionary spending line items are on the table and subject to
deep cuts. The overall goal is to rein in spending and reduce the
family’s overall debt from prior years of budgetary excesses.
This year the automatic sequester will eliminate spending on the
Caribbean cruise, the Disney World vacation, and the kids’ new
42-inch flat screen. Meanwhile, the 2013 SUV and 30-foot sailboat
have been reclassified as “essential expenditures,” designed to
help relieve the oppressive job stress my friend faces.
My friend has also determined that the Disney trip and 42-inch
flat screen would undermine the children’s attention to their
studies and therefore should continue to be classified as
discretionary expenditures, ripe for elimination. As for his wife’s
argument that the Caribbean cruise should be spared from the
sequester axe on the same “relief from job stress” theory, my
friend contends that homemaking isn’t stressful, but rather “a
life-changing experience filled with complexity and opportunity.”
The jury’s still out on his family harmony in the wake of that
rather risky assertion.
My friend’s wife says his “sequestration” plan is nonsense. She
calls his plan “smoke and mirrors” budget gimmickry and warns that
the cold realities of household finances will catch up with them
eventually and may even put them into bankruptcy. She argues that
to “live within their means,” the family budget should simply cover
all expenses if they are reasonably foreseeable, without resorting
to the painful sequestration exercise imposing automatic,
across-the-board cuts with a budgetary meat axe.
He responds that, in the event of a “revenue shortfall,” the
family could always borrow or simply rely on the time-honored
government artifice of “deficit spending” by maxing out on all
their credit cards. In response to his argument that they could get
a “bridge loan” or a “debt consolidation loan” to cover those
discretionary items on the sequestration hit list, his wife
forcefully reminds him that they have already taken out a home
equity loan to cover college tuition and emergency roof
repairs.
“We have mortgaged our entire future already,” she grumbles.
“Why, I may have to exercise my line-item veto once again to
restore some fiscal responsibility around here.” She pauses, and
then adds with a twinkle in her eye, “Of course, that veto will
only apply to the boat and the SUV. The Caribbean cruise and Disney
World trip clearly are essential family expenditures.”
All in all, it seems budgetary arguments always to boil down to
whose special family interest “pork” is getting whacked in the
sequester process.
