Thursday, July 28, 2011


What were you doing in 1974?  That was when baseline budgeting was created.  Let me see if I can break it down in normal language:  If you had a household budget of $2000.00/month in 1974, that is $24,000.00 annually.  In 1975, your budget is automatically increased by, let's keep it simple and say by 10%.  So, in 1975, your budget is $26,400.00.  You just go to your employer and demand a pay increase to keep up with the budget.  In 1976, it automatically increases again by 10% to $29, 020.  You demand another pay increase from your employer to keep up with the budget.  1977 automatically brings your budget to $31,922, etc., etc., etc.  This is what our government passed in 1974.
In addition to the baseline budget, if you want to buy a new car, that is an increase in spending.  You ask your spouse if they want a new car.  They say yes, so the new car is put in the budget, which increases it.  So, in addition to what is already allocated for the automatic increase, you add the expense of the new car, insurance, maintenance, etc.  The new budget, then, increases the baseline.  So, if you bought the car in 1977 for a monthly payment of $249.00 and insurance of $150.00 and maintenance of $100.00, that is a total of $5988.00 added to your annual budget.  So, in 1978, your baseline is $31,922.00 plus $5899.00 plus that automatic 10%, making your budget $41,603.00.  You just go to your employer and demand a pay raise.
This is what our government has been doing to us since President Nixon.  This is not a democratic or a republican thing, it is a politician thing.  We need to have a constitutional amendment to balance our budget now.  A couple of months ago, Timothy Geithner said that the current amount of spending in Washington is not sustainable.  We have to hold our representatives accountable for the spending in Washington.  We are the "employer" and this "employer" is out of money and in survival mode.
Please take the time to contact your congressional representatives today and voice your concerns.  If you don't know who they are, contact me and I will send you a list with contact numbers.  Please, do it today.
I know we are all busy just attending to our own daily lives.  But, this is really important.  Please do it today.

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