Cash Cow Budgeting

Citizens are cash cows.  A cash cow is defined as, "a steady, dependable source of income."  As citizens, we are required by law, through threat of force, to pay taxes to the federal government.  The federal government could decide to tax us any amount they wished, and we would be forced to pay.  To refuse would be illegal, no matter how just.  Therefore, we are the government's cash cows.

Just what did the government spend our hard-earned money on in 2010?  22.62% was spent on health care (Medicare/Medicaid) and 20.04% was spent on Social Security.  The chart can be found here.  That means 42.66% of the federal budget was spent on welfare.  But what does that mean dollar-wise?  Going to the president's website, it is easy to find percentages, but difficult to find hard numbers.  In 2010, the federal government spent $3,456 billion ($3.456 trillion) while it only took in $2,162 billion ($2.162 trillion) in taxes.  Interestingly enough, if I spent more than I earned, I would be charges some serious overdraft charges from my bank.  I wonder where the government banks... Oh yeah, they bank with the Federal Reserve, a bank where money can be created from thin air.

Back to the number game: 23% of $3.5 trillion is $794 billion and 20% is $691 billion.  That equals $1.49 trillion spent on welfare alone.  That is over half of what the government brought in through taxes.  68% of our taxes go to welfare.  19.27% of the budget pays for our military and a mere 0.81% goes towards legal and immigration.  If we include the 3.26% that goes towards veteran benefits and the 1.65% towards international affairs, that brings us to 24.99% of our budget goes towards defense and legal.  $863.65 billion is spent on national defense and our legal system.

If the federal government only undertook its three responsibilities (military, court system and police force) the total budget spending would be roughly $863.65 billion per year, assuming we cut out all welfare and privatized everything else.  As of Feb. 16, 2011, the population of the United States was 310,831,978.  If we divided that out, every person in the United States would have to pay $2,778.51 per year to balance the budget.  Currently the average American pays roughly 20% of their salary to federal taxes, and the average salary is $29,500, which translates into about $5,900 in taxes per person.  That means, if the government only spent money on what was necessary, it would save the average American approximately $3,121.49 per year.



If we kept the taxes the same as they were in 2010 and from the $2.162 trillion subtracted the $863.65 billion for military and legal, the government would be left with $1.3 trillion.  The current US National debt is $14.13 trillion.  It would only take 11 years for the government to pay off the national debt under this plan, assuming the US government incurred no further debt.  11 years may seem like a long time to hold a debt, but when you consider Obama's current 2011 budget plans for an increase in national debt of $13 trillion, 11 years to being debt-free doesn't sound bad at all.

© 2011 Nate Phillipps

So Sue Me

With the proliferation of lawsuits in recent years, it is difficult to imagine an issue one isn't able to sue over.  The frivolous lawsuit was not starting in 1994, but it was given a push from a rare occurrence to an everyday undertaking.  The lawsuit I am talking about is Liebeck v. McDonald's, where a woman successfully sued McDonald's because their coffee was served hot.  Today, we have warning labels on everything, from coffee cups and lids, to scissors.  The jury determined that Liebeck was only 20% at fault for the incident, and that McDonald's was 80% to blame.

Just like a trend or clothing fad, the act of engaging in frivolous lawsuits, against companies whose only fault is they sold their product to morons, caught on like wildfire.  When I was a kid, we got into the habit of saying, "So sue me," every time we did something our friends didn't like.  As a kid, I never really thought about why we were saying that, but now as an adult I understand.  What frightens me is that most adults don't understand, and continue to sue for ridiculous things.  Why are frivolous lawsuits so appealing?

Despite many people saying we are currently in the Information Age, I believe we are in the Entitlement Age.  With Social Security, amnesty for illegals, welfare, mandatory health care, affirmative action, bailouts and an array of other government sponsored benefits, it's easy to see why everybody has a sense of entitlement.  Nobody is willing to work for money, or to earn anything.  They expect to be given things based solely on the fact that they aren't earning anything.  Need is not something one can exchange for value.  Unfortunately most of the government and population have bought into entitlement 100%, after all, it's 'free' money.

Not everyone has bought in though.  I was sitting in on a trial in court, and it was a divorce proceeding, and the prosecuting was telling the judge that she was entitled to the defendant's financial records, going back as far as she liked, even before the marriage.  The judge was an older man and said, "I'm here to tell you that you are not entitled to those records."  So there are judges out there who still posses common sense, although I get the feeling that they are far and few between.

What can we do to stop the flow of frivolous lawsuits?  I would suggest encouraging your friends to use their brains and to remind them that when they order hot coffee that it usually comes hot.

© 2010 Nate Phillipps