As some of us remember, Ross Perot loves charts.  They do a good job of conveying limited bits of information.

Well, despite not running for President this year, he has updated his charts.  Take a look at his Challenges presentation.

I think it is logically put together, and does a better job of pointing out the long term risks we are playing with regarding the entitlements programs that have been created and expanded.  There is a lot of other information out there too.

After looking at the preentation, let me know what you think.

If you enjoyed this post, make sure you subscribe to my RSS feed!

AddThis Social Bookmark Button

Why do people drink Coke over Pepsi?  Or Pepsi over Coke?  What about choosing between sugar, Equal, Nutrasweet, and Splenda?  Proponents of each can - and will - speak out about the virtues that make each one better than the other options.

This difference is critical.  And not just for food and drink.

Promotions

When choosing somebody to promote, managers look at what differentiates their employees.  One may put in 80 hours a week.  Another can plow through repetitive and boring tasks quickly.  Another is the troubleshooter - able to solve any problem given the time and space to work on it.

The employee chosen will depend on the requirements of the new job and how they are percieved by the decision maker(s).

My Identifier

My unique identifier is that I am flexible and broad-based.  I know a little bit about a lot of things.  In addition, within my mind is the ability to easily translate previous experience to a new situation.  Therefore, I can be brought into a new environment or situation and quickly be useful.

In Information Technology (IT), this is a very valuable ability.  Tools and technologies change very quickly and often people are asked to use multiple tools at once.  Even different versions of the same tools can be very different.  People like myself are uncommon.  It is not unusual to take weeks for somebody new to a project to become productive.  I can, and have, make positive contributions from the first day to the last day I am a part of a project even if using products I have never worked with before.

Think About Yours

Think about what your unique identifier is.  How do you see yourself?  Are you a reliable, steady worker?  A mad scientist who gets surprising and good results?  A people-person who brings out the best around you?

Take some time and write out your identifier, like I did above.  In most cases, it should be general statements where the benefit to an employer/client is the focus.  The last sentence in each paragraph above is my identifier.

Entrepreneurs will recognize this as the classic elevator pitch.  This is how you tell people what you/your business/your product can do for them.  If they buy, what do they get?

Realize that an identifier can be negative as well as positive.  If your is negative, fix it now.  If it is not as good as you want it to be, upgrade it now.  Find a simple change that will make an improvement.  Make that change.  Repeat with a new change.  Continue until you reach the limits of what you are willing to commit to.

Recognize that the lower your limits are, the less distance your identifier can take you.  This is not always a bad thing.  Working 80-100 hour weeks is a positive thing for very few people.  That is why most of us do not do that.  Yet, if we worked more hours at the same level of productivity as we do now, most of us could go further in our careers.

Use Your Identifier

Now that your personal identifier is in tip-top shape, use it.  At the very least, speak with your boss and point out the improvements.  Ask for something consistent with the improvement - more flexibility, new responsibility, promotion, a pay raise, public recognition, etc.  Asking for a promotion because you come in 15 minutes earlier every day is not fair unless you have been under-recognized before.

If you get it, great.  If not, do not be afraid to look for a new employer who will recognize your worth and treat you accordingly.  Once you have that offer, it is up to you to choose how to proceed: resign gracefully or negotiate with your current employer for something similar or better.  Only you know which will be right for you.

Regardless, work to maintain your personal identifier and do not be afraid to continue to work to improve it.  Use it intelligently and take care of yourself.  Do not forget that your personal identifier applies outside of work too.  The rewards will be different, but how you are percieved and think of yourself has a huge influence on your relationships and success in life.

If you enjoyed this post, make sure you subscribe to my RSS feed!

AddThis Social Bookmark Button

I volunteer to take other peoples' teenage boys camping - for fun.

Not exactly the top choice of that many people.  Especially those that do not have any kids of their own.  Yet, it is something that I really enjoy and look forward to.

It is partially because of the great outdoors.  It is fun to sit on the back porch with a glass of sweet tea and watch the sunset and people using the park next door.  Getting further out is even more fun for me.  Driving up to a popular lake, hiking along a mountain creek or backpacking into a heated canyon excites me.  Testing my skills against nature makes me content.  Succeeding against difficulties most people shun makes me proud and confident.

That is not the main draw of being a Scoutmaster and taking other peoples' sons camping.

Teaching

Many of the boys that I work with come from stable homes and families that are solidly middle class.  Despite being urban, they have a great environment to grow up in.  A few are less fortunate, living in single parent homes.  A few camp as a family, but for several, Scouting is their best (only?) opportunity to get into the outdoors.

It is also my best opportunity to teach.  I estimate that I have spent more than a year outdoors during my life.  Usually in 1 to 2 night increments, but several one to two week expeditions.  This has made me comfortable and competent in the outdoors - although I will not claim to be an expert.  I do know enough that I can teach the basics of comfort, survival and Leave No Trace.

Part of the enjoyment for me is watching the young, uncomfortable ten-year olds grow up into experienced, confident, competent teens and young adults.  The best part if that it is about more than just camping and hiking.

Responsibility

The boys learn about the requirements of responsibility.  Usually, it is by suffering the consequences of not being responsible.  For the smartest ones, they only forget the poncho or the extra layer of clothes once.  For others, it is a regular experience forgetting important bits of gear or information.  Fortunately, I have never had a situation where I've needed to alleviate the situation for a health or safety reason.

The best ones begin to demonstrate the responibility beyond themselves.  Some volunteer to teach the newer scouts.  Others step into leadership roled in the troop and flourish.  Each scout grows up in their own way, but it is rewarding to see when it finally 'clicks' and they begin to understand what the program is truly about.

Those scouts that get it account for most of the scouts that earn their Eagle award.  It is a proud moment when each of them receives that award - the cumulation of a lot of work on their part and their parent's part with the willing assistance of many others.

Results

In the end, the reason that I enjoy being a Scoutmaster so much is that the results are so impressive.  I have fun spending time in the outdoors, working with young men who are learning a lot and beginning to demonstrate the skills of leaders and model citizens.  For the small amount of money that it costs, the rewards of the program are so great.

If you enjoyed this post, make sure you subscribe to my RSS feed!

AddThis Social Bookmark Button

Being past the midpoint for this year, it seems to be a good time to take stock and review how I am proceeding against my goals.

Emergency Fund

My emergency fund has been built and is now sitting at a little over $1000.  Goal complete.

Credit Card Debt

At first, I did poorly with this goal for the year.  Several factors pushed it higher as I started my job, resulting in a high balance of greater than $17,000.  The good news is that it hit a balance of $0 on June 30.

Now, I will admit that I am not doing what Dave Ramsey recommends (among many others) and cutting up my credit cards.  I am continuing to use them for everyday purchases.  This is for three reasons.  First, by doing so I can automatically have my purchases categorized against my budget.  Second, I actually spend less using plastic (cash disappears from my hands in ways I have not been able to track).  Finally, the cards that I use have rewards that are worthwhile to me.

At this point, continuing to use my cards is not a problem.  In this first month, I am well on my way to finishing with a balance that can easily be paid in full.  I know I will have to keep track and ensure that I do not start letting the balances roll over.

Car Loan

This goal has not been touched.  The emergency fund and credit cards came first.  At this point we have a plan to work on this balance.

Housing

This covers goals 4 and 5 from my original post.  Both goals are moving forward.  We are in the process of packing up most of the decorations in the house and moving them temporarily to storage.  When it is complete, we will bring in professionals to give the house a top to bottom clean so we can list it for sale.

On the new home side, we have talked withseveral builders and are getting quotes for the first phase: architectural drawings.  We are telling the architects/designers that we want to have everything specified in excruciating detail - actual model numbers for faucets and light fixtures.  Specific makes of carpeting, etc.  Essentially, I am shooting for the ability to refer back to these drawings and schedules to resolve any disputes and questions that arise during the build process.

I know it will not solve or prevent everything.  Yet, that level of detail and thoroughness will make the rest of the process as painless as possible.

If you enjoyed this post, make sure you subscribe to my RSS feed!

AddThis Social Bookmark Button

What does an ideally minimal government look like?  We can look to European governments for an opposing view where the state enforces controls on individuals and businesses alike while owning in some cases certain services.

We can look to many developing and mostly developed countries ranging from India to Mexico and including several sub-Saharan African countries.  These countries fail to permit all of their citizens equal rights and in some of them outright government corruption worsens the situation.

Even the American state is a poor example as over the years the importance of individual responsibility has been subsumed by the steady approach of a nanny state and the rising political value of businesses and coalitions and the decreasing effectiveness of the individual in the political process.

It is time to rebuild our government into something that is small while protecting our country and ensuring individual freedoms.  Yes, it will be a significant shake-up of the status quo.  But as Ben Cohen (yes of Ben&Jerry's) shows, it is doeable.  He isn't the only one, so rest assured this is not an empty exercise.

I am not a Libertarian, although I agree with a number of their ideals.  As of now though, it is their extremists who garner the most coverage.  Being an extremist is not the way to make change happen, although they do play a role in starting efforts for change.  Think back to various protest groups whose viewpoints have become mainstream - women's suffrage, anti-segregation, even the American Revolution.  By themselves, the individual acts that brought notice to the protesters and movement were not enough to make the change happen.  It was when the majority took heed and accepted the cause that change occurred.

The extreme Libertarians are in that position right now.  They are getting notice and more followers.  Yet the most extreme views still go many time further than a plurality of this country is willing to accept.  Things like the complete legalization of drugs (all drugs), abolition of the income tax, and the elimination of the Federal Reserve is beyond reasonable expectations.

The principles, especially as they can be backed by the writings of such notable historical figures as Banjamin Franklin, George Washington, and Thomas Jefferson, are sound.  Their contributions to the founding of our country and their visions for its progression are among the best examples that we have available to us.

Thomas Jefferson put it well with:

A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor and bread it has earned - this is the sum of good government.

George Washington:

Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.

Benjamin Franklin

The Constitution only guarantees the American people the right to pursue happiness. You have to catch it yourself.

Note, that while there is a lot of concern over a small government, there are no serious suggestions of eliminating the government.  Especially in today's global environment, the elimination of the Federal government would be a mistake and a tragedy.  Even mostly emasculating it would prove more harmful than helpful.

Instead, what needs to be done is to make changes to reduce the size of the Federal Government in meaningful ways.  This means migrating as many reponsibilities as possible (education, many health and welfare operations) completely too the states - including setting standards and choosing how to fund them.

There are areas where a national entity will be more effective and efficient than one that is run by the individual states.  That does not mean that it should be run by the Federal Government.  Instead, the States themselves should be empowered to develop cooperative institutions - funded and governed by the states individually - to take advantage of that economy of scale.

Those areas that are legitimately the Federal Government's reponsibility - without the massive overuse of the instate commerce clause - ought to be streamlined and minimized.

Making these change is not without winners and losers.

Individual responsibility will play a much bigger role.  Those who are looking for somebody else to make decisions for them will face a real chance of falling through the cracks.    Let me rephrase.  Those who do not take responsibility for themselves will fall behind and will never catch up.

There is another major category of losers from this change.  Those who benefit most from a large, powerful central government: lobbyist and their employers.  No longer would it be possible to get the same huge contracts and broad legislative action done by working with a handful of people.  Instead, 51 or more legislative bodies will need to be approached and convinced.  The opposition will be able to have more of an impact, with legislators living closer to the affected citizens and much easier to be reached.

Winners will be those individuals that plan ahead, are willing to stand up and be heard, and who will take advantage of their rights.  By recognizing that the right to the pursuit of happiness does not guarantee reaching, these individuals will continue to put in the effort required to work for their goals.  Many of these citizens will reach those goals.

Their success will be more than individual accomplishment,  Like the Fords, Rockefellers, Boeings, Waltons, Trumps and other imperfect leaders of America they will pull others along.  Our country has been built by hands like thiers guiding millions of hands like ours.  One man's vision can consume tens, hundred, even thousands of others to achieve.

These will be the winners of such a change.  The individuals with the vision and will to keep our country moving forward.  Their success will outweigh the decreased ability of multination corporations to push their own agenda forward.

Is the tradeoff worth it? It has to be.  As things are progressing now, we are flirting with national disaster in slow motion.  An expanded central government that spends beyond its means, encourages inflation and favors large corporations over individuals threatens to end the Pax Americana just as the Pax Romana eventually ended in the decline and fall of that great government.

It is difficult to argue that America needs to change to avoid disaster.  How it needs to change is the more difficult question.  A return to a weak federal government and strong state governments offers the most hope for long term stability and continued success of our nation.

As always, anybody who wishes to agree or disagree (respectfully!!) is invited to post a comment and join the discussion.  How do you think the US needs to change?  Do you agree thatthe move to greater individual responsibility is the best way to go?

If you enjoyed this post, make sure you subscribe to my RSS feed!

AddThis Social Bookmark Button

Dave Ransey is a great personal finance guru for millions of individuals out there.  His Christian viewpoint, practical advice, and emphasis on personal responsibility and shunning of debt is a breath of fresh air in an environment where debt is king.

A voice in the financial desert is a good way to describe Dave.  He has been there before us.  He has made money, gone bankrupt and made money again.  Now, he earns his living by teaching people a way to get out of debt, stay there, and reach their financial goals.

What is the most refreshing about Dave Ramsey is also where he is wrong.  He is stubbornly against loans with very few exceptions.  Even though used right, there are loans that can benefit the consumer in the end.  Why is he against them?  He is against them because even with the good loans, most people will come out behind.

Let me repeat that. Even using good loans, most people come out behind.

When borrowing money, it only takes a minor mistake or two to lose money.  In most cases (car loans, payday loans, unsecured loans, etc.) the mistake is in taking out the loan in the first place.  For others, it is in getting the wrong terms, financing the wrong amount, or making a late payment (or several), or simply not being able to meet the obligations because of life changes.

Each one of us strives to be better than average.  Each one of us belives that we are better than most.  Anytime there is an exception to a rule, we want to believe we are the exception.  This is why people gamble, play games of chance, and take risks with their lives and money.  Ultimately, few of us will manage to always stay above that line.  Depending on the risks we take, when we fall below, it can be a minor irritation, very painful, or fatal.

Dave Ramsey may be wrong on saying to avoid all loans.  Some people can prove him wrong.  For 99% of us, avoiding debt completely is going to be the right way to go.

Dave Ramsey is wrong, but we will all be better often listening to him anyways.  Listen to Dave.

If you enjoyed this post, make sure you subscribe to my RSS feed!

AddThis Social Bookmark Button

Nuke the Fridge may become this decades equivalent of "jumping the shark".  Now, don't get me wrong - Indiana Jones is an immensely entertaining series of movies.  Yes, it asks you to suspend disbelief regularly and just watch for the entertainment bit.  However, nuking the fridge was so over the top

Movies and TV series are not the only places that can Nuke the Fridge.  Individuals can do it (jump the couch).  Companies can destroy their credibility and business with a single over the top action (Arthur Anderson).

Governments are not immune to this.  When a government fails spectacularly the results are not as giggle-worthy as Harrison Ford stepping out of the fridge with a mushroom cloud in the background.  A government failure of that magnitude produces a lot of pain and suffering internally and is seldom quickly resolved.

Zimbabwe is an example of a current such crisis.  A failed land redistribution effort has led to years of hyperinflation with no end in sight.  It does not always have to be a quick detonation.  Japan suffered a real estate decline for more than a decade.  This dragged down their economy for a significant amount of time.  The country still has not fully recovered.

My worry is that there is an acceleration in the US government's travel towards the same situation.  Rising federal budgets lead to increased deficit spending and larger debt burdens.  Despite that, entitlement programs are being expanded and new ones proposed.  Tax cuts and credits are offered by politicians like candy.

If this trend continues, like a tsunami, eventually everybody will be able to see it coming and nobody will be able to do anything about it.

The difference is that the US government has not Nuked the Fridge yet.  We do not have a tsunami appearing on the horizon.  There is still time to prevent it and ways to make the pull-back not as painful.  But changes need to start happening soon.  Who is going to ignite and guide those changes?

As we go into the general election for this year, I am afraid that there is not a viable candidate who is even going to try.

If you enjoyed this post, make sure you subscribe to my RSS feed!

AddThis Social Bookmark Button

One of the things that keep coming up in my posts is that I feel the Federal government is too big and intrusive.  From a simple financial viewpoint it is either too big or we are not taxed enough.  The government needs to be able to supply the services it does using just the resources available to it.

In that respect, our federal government should operate no differently than we do.  While it is acceptable to occasionally spend more than we make, we need to save up to replace the extra spending or have paid for the 'surge' out of savings that we already have.  Constant deficit spending is bad for us and is bad for our government.

I have recently come across the website for a minor political party which seems to have a similar viewpoint: The Populist Party.  If you view their basic platform and self explanation, they are actually arguing for politicians at the national level to voluntarily reduce their own power to create a smaller national government and to strengthen state and local governments.  The best part is that they argue for personal responsibility and freedom where it does not interfere with others freedoms.

What do you think about this?  I am going to look into them further myself.  Hopefully the surface view holds upon further review and they are truly mainstream enough that there will be hope of helping them become a major party (because why should we be limited to two parties?)

I definitely see how they could be a fringe group whose idealism and fanaticism far exceeds what is useful or reasonable.  At the same time, they could also be a group whose view can be accepted and adopted by Americans across this great country.

If you enjoyed this post, make sure you subscribe to my RSS feed!

AddThis Social Bookmark Button

There are two ways to get ahead financially. Most people who are reading this article will readily recognize both of them:

  • Spend less than you make

and

  • Make more than you spend

That is it. Every single way that you can get ahead financially will fit into one of those two categories. Nothing mind-blowing by itself. What I want to do however, is to challenge you to look at life from the second point of view.

Rather than competing to see how little you can spend, put your energy into maximizing how much money you can bring in. The difference is truly night and day. Lets look at how.

Let us assume there are two categories of people to match the two ways of looking at financial wealth building. One group, the Frugals, spends their time working to minimize what they spend. The other group, the Grinders, spends their extra time trying to increase their income.

Now, since finances over the long term vary dramatically with small changes, we have to make some assumptions. In setting this up, care was taken to choose assumptions that even out between both options. So, no massive raises for the Grinders, and no excessive investment returns on savings for the Frugals.

Assumptions

Frugals

  • $50,000 initial salary
  • Raises match inflation perfectly
  • 40% savings rate
  • 4% return on savings after inflation

Grinders

  • $50,000 initial salary
  • Raises match inflation plus 2.5%
  • 20% savings rate initially
  • 50% of raises are saved
  • 4% return on savings after inflation

Results

  • Frugals have more savings for the first 32 years
  • Grinders finish with 10% more savings, but set aside 36% more over the years
  • Grinders standard of living increases every year

Frugals start off much stronger. Their savings ethic lets them build up to a very nice retirement portfolio with constant progress in the right direction. At the end of their efforts, their lifestyle requires just 1.3% of their savings for retirement. This means they can increase their standard of living in retirement and still live off less than the income from their savings. Or, the Frugals can retire early while maintaining their standard of living.

Grinders raise their savings and their lifestyle every year. Eventually, they are able to reach and overtake the Frugals. However, the income required from savings to maintain their lifestyle is 3.8%. This is much closer to the maximum 4% withdrawal rate recommended. This means that Grinders are more sensitive to recessions and run a higher risk of outliving their money.

Still, even the Grinders do very well for themselves with an excellent change of a long and happy retirement. The best part is that they do not have to dent themselves to get there. So, given the choice, I'd rather be a Grinder myself.

Fortunately, nothing prevents us from learning from both.

Frugals

Year Income Savings Total Savings
1 $50,000.00 $20,000.00 $20,000.00
2 $50,000.00 $20,000.00 $40,800.00
3 $50,000.00 $20,000.00 $62,432.00
4 $50,000.00 $20,000.00 $84,929.28
5 $50,000.00 $20,000.00 $108,326.45
6 $50,000.00 $20,000.00 $132,659.51
7 $50,000.00 $20,000.00 $157,965.89
8 $50,000.00 $20,000.00 $184,284.53
9 $50,000.00 $20,000.00 $211,655.91
10 $50,000.00 $20,000.00 $240,122.14
11 $50,000.00 $20,000.00 $269,727.03
12 $50,000.00 $20,000.00 $300,516.11
13 $50,000.00 $20,000.00 $332,536.75
14 $50,000.00 $20,000.00 $365,838.22
15 $50,000.00 $20,000.00 $400,471.75
16 $50,000.00 $20,000.00 $436,490.62
17 $50,000.00 $20,000.00 $473,950.25
18 $50,000.00 $20,000.00 $512,908.26
19 $50,000.00 $20,000.00 $553,424.59
20 $50,000.00 $20,000.00 $595,561.57
21 $50,000.00 $20,000.00 $639,384.03
22 $50,000.00 $20,000.00 $684,959.40
23 $50,000.00 $20,000.00 $732,357.77
24 $50,000.00 $20,000.00 $781,652.08
25 $50,000.00 $20,000.00 $832,918.17
26 $50,000.00 $20,000.00 $886,234.89
27 $50,000.00 $20,000.00 $941,684.29
28 $50,000.00 $20,000.00 $999,351.66
29 $50,000.00 $20,000.00 $1,059,325.73
30 $50,000.00 $20,000.00 $1,121,698.76
31 $50,000.00 $20,000.00 $1,186,566.71
32 $50,000.00 $20,000.00 $1,254,029.37
33 $50,000.00 $20,000.00 $1,324,190.55
34 $50,000.00 $20,000.00 $1,397,158.17
35 $50,000.00 $20,000.00 $1,473,044.50
36 $50,000.00 $20,000.00 $1,551,966.28
37 $50,000.00 $20,000.00 $1,634,044.93
38 $50,000.00 $20,000.00 $1,719,406.73
39 $50,000.00 $20,000.00 $1,808,182.99
40 $50,000.00 $20,000.00 $1,900,510.31

Grinders

Year Income Savings Total Savings
1 $50,000.00 $10,000.00 $10,000.00
2 $51,250.00 $10,625.00 $21,025.00
3 $52,531.25 $11,265.63 $33,131.63
4 $53,844.53 $11,922.27 $46,379.16
5 $55,190.64 $12,595.32 $60,829.64
6 $56,570.41 $13,285.21 $76,548.04
7 $57,984.67 $13,992.34 $93,602.29
8 $59,434.29 $14,717.14 $112,063.53
9 $60,920.14 $15,460.07 $132,006.14
10 $62,443.15 $16,221.57 $153,507.96
11 $64,004.23 $17,002.11 $176,650.39
12 $65,604.33 $17,802.17 $201,518.58
13 $67,244.44 $18,622.22 $228,201.54
14 $68,925.55 $19,462.78 $256,792.38
15 $70,648.69 $20,324.35 $287,388.42
16 $72,414.91 $21,207.45 $320,091.41
17 $74,225.28 $22,112.64 $355,007.70
18 $76,080.91 $23,040.46 $392,248.47
19 $77,982.94 $23,991.47 $431,929.88
20 $79,932.51 $24,966.25 $474,173.33
21 $81,930.82 $25,965.41 $519,105.67
22 $83,979.09 $26,989.55 $566,859.44
23 $86,078.57 $28,039.28 $617,573.11
24 $88,230.53 $29,115.27 $671,391.30
25 $90,436.30 $30,218.15 $728,465.10
26 $92,697.20 $31,348.60 $788,952.30
27 $95,014.64 $32,507.32 $853,017.71
28 $97,390.00 $33,695.00 $920,833.42
29 $99,824.75 $34,912.38 $992,579.14
30 $102,320.37 $36,160.18 $1,068,442.49
31 $104,878.38 $37,439.19 $1,148,619.37
32 $107,500.34 $38,750.17 $1,233,314.32
33 $110,187.85 $40,093.92 $1,322,740.81
34 $112,942.54 $41,471.27 $1,417,121.72
35 $115,766.11 $42,883.05 $1,516,689.64
36 $118,660.26 $44,330.13 $1,621,687.36
37 $121,626.77 $45,813.38 $1,732,368.23
38 $124,667.43 $47,333.72 $1,848,996.68
39 $127,784.12 $48,892.06 $1,971,848.61
40 $130,978.72 $50,489.36 $2,101,211.91

If you enjoyed this post, make sure you subscribe to my RSS feed!

AddThis Social Bookmark Button

When I started writing this blog, I had every intention of writing about my current financial situation and how I was bettering it.  I still get to write some of those posts, but not as many as I would if I was laser focused on just my own financial well-being.

Instead, I have seen this take a wider view and, dare I say it, even some political overtones.  While it has not been intentional, it is a logical progression.  There has always been an interest in economics and how wider forces can impact me.  So I started looking at those forces in an effort to find ways to suggest to you, my readers, ways to take advantage.

In my efforts to make sense of these larger forces, there has been a need to explain the lessons learned about them.  This has resulted in some more interesting posts like: How To Live on Minimum Wage, Wal-Mart is Bad for US(A), and Leasing a New Car Makes No Sense.  Others have proven to be less popular, but helped me understand more: What is Financial Independence?, The Scale of the Federal Deficit, and How to Snowball Debt.

The surprise has been that by looking into some larger scale items like the national debt and Social Security, my interest in politics has grown.  It certainly is not because of politicians or their attempts to protect us from us.  It is because of how tightly integrated politics is to economics which strongly influences what happens to me and you as individuals.

It should not have been such a surprise.  Politics is about deciding what needs to be done as a country.  Getting things done is about using resources (money).  Those resources have to come from somewhere.  That somewhere is the economy.

I guess it was because in my mind the economy was like a wild elephant and the government a ranger.  The government could poke and prod the economy and tell it where to go, but you never knew if the economy would cooperate or if it would try to trample the ranger.

The more I learn, the more the analogy changes.  It still seems like the economy is a elephant, but is a trained one.  The government has carrots and treats and a small slender prod to get it to do tricks.  Usually, it behaves well.  Rarely it gets upset or sulky and bad things can happen until the circus gets shut down.

It seems to be a valid analogy.  The bigger government is, the more the economy is like a performing elephant.  The smaller government is, the more of a wild elephant.  Despite the apparent dangers, the more I learn, the more I think we ought to be looking for a wild, untamed economy.

Give me your thoughts - pro and con.  I'll start you off with just a few of the multitude of items that can be expanded on:

Pro

  • A smaller government means it needs less money out of my pocket to operate
  • A wilder economy means that only the best companies will be able to survive the harsher cycles

Con

  • A larger government is better able to address the thousands of dangers that face us from carcinogens to global warming and recessions
  • A tame economy means fewer layoffs and more stable employment

Agree?  Disagree?  Want to add to the list? Add your comments.

If you enjoyed this post, make sure you subscribe to my RSS feed!

AddThis Social Bookmark Button

Next Page »