DAVE RAMSEY

As the country song goes, I was Dave Ramsey before Dave Ramsey was cool. I started on a written budget in college and have never lived without one. On paper, every month, year in and year out. I keep every monthly budget I've ever had. Maybe time to throw some out from the 90s, hmmm? The ones from the early years are long gone, but I know I have some dating back to the early 90s still in a filing cabinet! I also have not had a car payment since 1994. I realized a long time ago that NOT having a written monthly budget that you have the discipline to stick to and having monthly car payments are the two biggest things people do to keep themselves stuck in the struggling lower middle class. The general public buys vehicles they cannot afford and it keeps them stuck. That's a fact. The car payment is probably the worst financial decision anyone ever makes, in my opinion. Ok, enough of my sermon for today!

Hi Forum,



I really like Dave Ramsey and think that he has helped a lot of people. A blogsite recently picked up on a quote of his and ran with it. I offer it here because the "If the Government were a family..." argument is one we hear often. I encourage you to read the blog-site post below and the response to it:


Dave Ramsey says:


If the US Government ​was a family, they would be making $58,000 a year, they spend $75,000 a year and are $327,000 in credit card debt. They are currently proposing big spending cuts to reduce their spending to $72,000 a year.”

The blogsite goes on:

Got the picture now? Washington sure as hell doesn't. The Democrats are calling for higher taxes, which (to use Dave Ramsey's numbers) would raise the family's income perhaps...by only about $5,300 per year. And under the Democrats' spending rules, any such increase in revenues would promptly allow them to increase spending by the same amount. So instead of taking in $58,000 and spending $75,000 per year, they would be taking in $63,300 and spending $80,300 per year. What a great way to reduce debt!


But even under the Republicans' Ryan plan, spending would still be reduced just to about $62,400 per year in Ramsey's numbers. So without an economic recovery, which would bring in more income for everyone, resulting in more taxes (without raising them), the Government (family) will still be increasing its credit card debt for the foreseeable future. And that is a recipe for bankruptcy, no matter how you slice it.

But then this insightful "reality check" comment from a reader:


Comment:


"If the US Government ​was a family, they would be making $58,000 a year, they spend $75,000 a year and are $327,000 in credit card debt. They are currently proposing big spending cuts to reduce their spending to $72,000 a year.”


It's a good analogy, but it needs a few more facts:

1) In fact, the family finally got its budget balanced a few years ago, but then Junior took over, and after giving away a lot to his rich friends, and getting into two fights he couldn't pay for, he so busted the budget that the house went into foreclosure.

2) Of course the family could balance their budget, by taking the kids out of school and putting them to work, and by letting Granny die by discontinuing her medical treatment. But, bad as going further into debt is, the family isn't willing to kill their kids' future or let Granny die.

3) Unfortunately, some people are so upset about the financial picture, they want to put Junior in charge again. They change the subject when you mention Granny.