Why the BBA is BAD!

I’m not good with money. As a matter of fact, I’m very bad at handling money. Although I’ve run a very successful business in the past, I was just never good at handling money. Last year during a very stressful time, I finally just gave up trying. My health was not good and getting worse every day. Emotionally and mentally I was just exhausted. So when the going got tough, this not so tough lady handed her check book, banking account and all the passwords over to someone who could manage it well.

I wasn’t giving up, I was just being logical. If you are a bad cook, you reach a point and realize that dining out will be in your best interest rather than wasting food from the grocery store. I just finally reached a point where I decided that it would ultimately be in the best interest of my family and me if I were well and healthy, and in order to be that way, I didn’t need to waste another minute dealing with financial matters.

I say all of this in the interest of full disclosure, but I’m about to talk about money. Lots and lots of money! How much? Trillions of dollars.

This is the money that the United States Government takes in and then spends (or more accurately, spends and then takes in) via your tax dollars. It is estimated that this year, the United States will take in $2.2 trillion dollars. This comes from two sources: income taxes and payroll taxes. (I highly recommend that you see the links below for more details from people and organizations that actually do understand money.)

In 2013, the United States Government spent $3.5 trillion. This was in the form of social services, education, welfare, national defense, and a few other things.

Now, I’ve already confessed to being bad at handling money. But I’m not stupid! Even I can see that when you take in $2.2 trillion and you spend $3.5 trillion, you are writing an awful lot of hot checks.

My financial advisor, the man who balances my checkbook every week, doesn’t let me get away with this. EVER! When I have money, I’m allowed to spend it. When I don’t, I’m not. He keeps up with how much I have and when I need to purchase something out of the ordinary, I ask if I have the funds to do this. When I don’t, I am simply not permitted to make the purchase. From what I understand, this is the way many households are operated in the United States and even countries abroad. It works for them. It works fairly well for me (yes, it’s my fault, not the advisor’s) so long as I take his advice.

Given the fact that even I understand the concept of not spending more than you bring in, and given the fact that federal legislators are probably a lot smarter than I am, how is it that we spend $1.3 trillion more a year than we take in?

When my financial advisor took over my bookkeeping, he informed me that he would work with me so long as I didn’t do anything foolish. I had to agree to tell him of extraordinary expenditures, agree to not spend more than we brought in, and plan for upcoming expenses. I think he could do amazing things if he was in charge of our national financial debacle!

In his absence, though, some have decided that the next best thing would be to pass a Balanced Budget Amendment and add it to our Constitution. This sounds so sweet. Balancing the federal check book – what a novel idea! We wouldn’t be allowed to spend more than what was brought in in taxes. While you’re chomping at the bit thinking how we can pass this, let me explain why it is the worst idea since tomato flavored ice cream.

What makes my, and probably your, bookkeeping work is that we choose to abide by the rules. We don’t spend more than we make. We try to do the right thing. If we choose to spend more than we make and don’t follow the rules, we only hurt ourselves. Therefore, we have a real incentive to do the right thing.

That’s not the case with Congress. It’s also not the case with our state legislatures.

When congressmen vote to send $1 billion to a foreign nation (who probably still hates us anyway), it doesn’t harm the congressmen one bit. When they promise millions to a state to help fund a new educational program, not only are they not personally hurt, they may very well be rewarded through special interest groups with a sizable ‘contribution’ to their re-election campaign account.

Furthermore, the state legislatures are NOT going to turn down any federal funding. When the feds require that a specific program is implemented, state legislators panic at the thought of an ‘unfunded mandate.’ Some states actually have budgets for their state that includes federal funding of 30% or more. What happens when they lose the federal funding? They would have to come up with the money in state tax revenues. No state legislator wants to be responsible for raising state taxes of any kind. So they gladly accept the federal funding to appease their constituency. (For reasons unknown to me, people often do not equate funding from any source as having come from their own wallets in the form of taxes.)

For these reasons, a Balanced Budget Amendment will not work. Every model of this amendment that I have read allows for the balancing act to be changed for nearly every imaginable reason. National defense requirements, national emergencies, and even just suddenly realizing that there isn’t enough money to meet the payroll allows for lawmakers to change the rules.

With an amendment that has no backbone to support it, how about a new concept? When I handed my finances over to my advisor, we never filled out a statement of how the books would be balanced. There were no rules or requirements in writing. We simply used common sense. You don’t spend more than you make. First graders understand that if they have 3 apples, they can’t give four to a friend. If this method has worked successfully for me for 9 months as well as for millions of households across America, why can’t it work for Congress and the US Government?

Honorable and decent members of congress are often heard begging for passage of this amendment. Why wait? Why don’t they just begin prudent financial procedures now? No one is stopping them. And I know a really good financial advisor if they need help.


~Temerity Dowell






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