Budget Crises
Washington Post graph of Federal Deficit as a percentage of GDP
We are surrounded by budget crises these days. There’s the City of Chicago, the Chicago Transit Authority, the State of Illinois, and of course, the Federal Government. Hearing about these financial crises can be discouraging to business owners. Is this the new “normal,” where it’s ok for expenditures exceed revenues?
If it were “normal” for businesses to consistently spend more than they made, they wouldn’t be in business for very long. With that in mind, is there any advice you can offer our elected officials on how they can balance their budgets? Let us know what tactics you would take if you were in charge of balancing a governmental budget.
Brad Farris is a small business advisor with Anchor Advisors, Ltd. in Chicago, Il. Since 2001 Anchor Advisors has been helping creative professional firms to grow, by helping them clarify their purpose, get the most from their people, keep their eye on key performance measures, and implement consistent processes. Brad is also the author of The Business Owner’s Champion: 6 Practices to Build your Nerve and your Business.
Posted March 10th, 2010 in Leadership, Small Business.
They will sort it out eventually, most of them can find places to trim the fat (and/or raise taxes *eye roll*). It is a little ridiculous that with the kind of manpower and supposed knowledge that these large governmental agencies have behind them that they cannot get a workable budget.
Luckily, here in Austin, things are going pretty well. The Austin ISD (independent school district) is having a financial crunch and some other things, but there’s nothing going on that would cause you to go all chicken little.
In fact a friend of mine and I were talking about how we got a letter from the census bureau this week. Do you know what that letter said? That letter was informing us that we would get our census soon and wanted to remind us to look out for it. Yes, my friends, they sent a letter to tell us they were sending us a letter. I wonder how much that cost taxpayers? Hmmm….
March 10th, 2010 at 8:29 AMI recently saw a USA today article that said that Federal workers earn on average 10% more than private sector workers and their benefits are worth 400% more than private sector workers. (see http://tinyurl.com/yeo8l2t) I think that’s got to change. But I do hope you are right Candy and they can get it sorted out.
March 10th, 2010 at 9:20 AMMy personal belief is that governments nationally have gotten too big. If I were in charge I’d sell off as many services to the private sector as I could, from public transportation to medicare. I’d avoid instituting any new regulations so the wonderful beast called the free market could get to work providing increasingly higher quality at lower and lower prices.
March 10th, 2010 at 9:56 AMThis just in! Gov. Quinn says that if we borrowed $4 bill and cut 13K jobs, Illinois’ budget would only be $11 bill in the hole. http://www.chicagotribune.com/news/elections/ct-met-quinn-state-budget-0310-20100309,0,4279309.story
March 10th, 2010 at 11:40 AMI wish I could be as optimistic as Candy. I think we need a fundamental change in our approach to, and expectations for, government. I don’t see that happening anytime soon.
A couple weekends ago, here in Minnesota, a group of state workers (AFSCME union members, of course) went to St. Paul to protest potential cuts to their budget. Their message was don’t cut our budget because “people need our services”.
Can anybody win an election by cutting programs and saying no to state employees? I don’t think so.
And the worst problems are not at the state level. Most states have to balance their budgets one way or another. Maybe their bond ratings get kicked around a little, but it seems that eventually states have to pull it together. Even if a couple of states were to go bankrupt (and I’m not saying this will happen) it might not be the worst thing. I think the effects would be short lived because a large percentage of state budgets are transfer payments to local governments and school districts anyhow. Bankruptcy would simply mean a transfer of obligations from state to local governments. Bringing the decisions closer to home might actually be a good thing. We might not see as many pro sports stadiums built, but in the scheme of things…
I am more concerned about the federal budget. Despite the grim projections for Medicaid, Medicare, and SS the former Senator from IL is hell bent on finishing the job started by FDR decades ago. Hopefully we can dodge this bullet, but if the Dems go ahead with the nuclear option.., oh well. I wonder how much harder it will be to finance the deficit (especially with the Chinese) if a multi-trillion dollar healthcare program gets passed.
When Congress, gets serious and finally cuts something dramatic (e.g. eliminates the redundant department of education, or starts a phase out of the SS ponzy scheme) I’ll feel better about the prospects for the federal budget. Right now, I don’t see anyone with the political will (or voter support) to do what needs to be done. The Republicans talk big but it is easy to talk big when you ain’t got the votes.
OK, my blood is starting to boil so I better get back to work. Someone’s got to pay for all this stuff!
March 13th, 2010 at 6:27 PM[...] we saw in a prior post, Budget problems abound. Our Government budgets are in deficit, many personal budgets are in deficit, is it any surprise [...]
March 15th, 2010 at 8:56 AM