We just finished our budget at GVMH and the President of the United States proposed his budget to Congress on Valentine’s Day and it got me to thinking about the importance of a budget.
Here’s the definition of a “budget”
1. plan for allocating resources: a plan specifying how resources, especially time or money, will be allocated or spent during a particular period
2. money for particular purpose: the total amount of money allocated or needed for a particular purpose or period of time
A budget is a tool to help monitor progress and in the case of GVMH we use our budget and compare it to actual to be sure our costs do not exceed our revenues and to be sure the money we do spend is spent on supporting our mission. It’s difficult to stay in business when costs exceed revenues over a long period of time. As I’ve said before, we’re not in business to make money but we’ve got to make some money to stay in business.
In the case of the federal government we have been spending money we don’t have which has caused the federal deficit to grow significantly and there will come a point that we can no longer “do business as usual”. The stability of the United States as a superpower is threatened if we do not reign in spending and reduce our national debt otherwise we may be the next Greece (if you don’t know whats happening in Greece then Google Greece + Debt).
It’s now estimated that the public debt of the U.S. will grow to 89% of GDP by 2020, 127% by 2030, 182% in 2040 and 246% in 2050. No country can support debt at these levels without huge costs to its standard of living at a minimum and most likely a severe crisis.
There are no easy choices when it comes to reducing debt, in fact, there are only two choices. One, increase income or two, decrease spending. So where do you stand on decreasing the national debt. Do you want to pay more taxes? Do you want the government to spend less money on programs like Medicare, the military, Social Security or roads and bridges? We all know that the current economy is improving but it’s fragile and any drastic action could threaten the recovery.
So what’s the solution? A recent email from the American Hospital Association shared a link to a website that I used to provide the debt estimates above. The website also has a budget simulator and I’d encourage you to complete the budget calculator to see if you can make enough difficult choices to stabilize the budget.
Can you stabilize the US debt? I tried and I was only able to get to 78% of GDP, remember, the goal is 60%. Now it’s your turn. Let me know how you do. You can use this link to run the simulator, if nothing else it’s eye-opening – to say the least. http://www.crfb.org/stabilizethedebt/