** An American Promise **
● A Balanced-Budget Amendment to the Constitution, with appropriate exceptions for times of war and recession.
● A line-item veto, to give the President a fighting chance to eliminate pork and earmarks.
● A limitation on federal spending, to 20% of GDP.
** About We Elected You **
** Building A Million Dollar Retirement Portfolio **The average carried credit card balance in the U.S. is almost $16,000 per household. The average interest on that carried balance is 12.79% (source: Creditcards.com). The true cost of borrowing money is the sum of interest paid, plus the earnings foregone had that money been invested; this is what economists call "opportunity cost": the cost of the foregone opportunity to do things differently. For example, the true cost of a "Zero-percent interest!" auto loan is actually the earnings foregone had the money been invested, i.e., around 6.6%; and the true cost (the opportunity cost) of a carried balance on a credit card is the sum of the interest charged (12.79%) plus the earnings foregone (an average market return of 6.6%), or over 19%.
Have Your Say!
- John Lumbard on Problems With a Balanced Budget Amendment?
- Chris Curley on Problems With a Balanced Budget Amendment?
- John Lumbard on How to Fix the Health Care Mess
- Did Government Agencies “Raid” Social Security “Coffers”? « Joejolly’s Weblog on “The Debt The Government Owes Itself For Raiding Social Security”
- John Lumbard on The Antidote
- Gen Y on The Keepers of the Flame
- Chuck Bailey on Amendment Filed. Call Your Congressman!
- Phoebe Addington on Party On!
- FaGaurlwal on Incentives Rule!
- James Schaefer on The ENTIRE Government Runs on Borrowed Money
Topics$1.6 trillion deficit $8.2 trillion American Promise Austerity Balanced Budget Amendment balance the budget bipartisan reform cbo compound interest Congressional Budget Office Constitutional Amendment Contract From America debt burden default economy entitlements fair tax system federal budget Federal debt Federal deficit fiscal respnsibility fiscal responsibility Fiscal Sanity government debt Greece growth of government interest rates Investing Judd Gregg limit on federal spending Line-Item Veto national debt Pledge of Fiscal Responsibility political platform Portugal Social Security Spending Cap Spending Limit Amendment Sustainable Government Tax Reform Tea Party Term Limits The Stock Market trillion dollars unsustainable fiscal policy
bipartisan reform Archive
By John Lumbard. When news came that we had not, like lemmings, jumped over a Cliff, celebrations broke out across the nation. Nearly a million people jammed the streets around Times Square, and the party lasted well after dawn. As the sun rose---coincidentally the first day of a new year---revelers quietly...Read More
By James Schaefer. Outraged by partisan gridlock, corporate CEOs have become central players in the fiscal cliff negotiations -- and the far larger effort to tame the nation's deficits and debt. Friday's Wall Street Journal ("Honeywell CEO in the Middle of Cliff Standoff", Monica Langley, December 14, 2012) gave a behind-closed-doors look at...Read More
By John Lumbard. Below you'll find the text of a speech that Senator Barack Obama gave in the Senate in March of 2006 (you want page S2237, if you'd rather read it there) regarding our debt and deficits---which at the time were growing rapidly under President Bush. Now they're growing rapidly...Read More
By James Schaefer. It's amazing what can be found on government websites. The Social Security Administration posts a chart of their annual FICA tax revenue, from 1937 to 2009, a full seventy-two years' worth (link). It shows the Trust Fund's cumulative surplus, and is reproduced below. From inception to 1987, the Trust...Read More
By John Lumbard, CFA. When we launched this blog in January of 2010 the federal debt stood at $12 trillion. The debt owed to the public (not including, that is, the US Treasury bonds held in the Social Security and Medicare trust funds---which Congress doesn't have to pay interest on or...Read More
By John Lumbard. The legislatures of seventeen states have recently passed a bill calling for a constitutional convention that would be focused solely on the drafting of a balanced budget amendment to the Constitution. Each of these bills explicitly states that it will be declared null and void if the Supreme...Read More
By John Lumbard. The fear that Europe will drag the U.S. into a recession is ebbing, and it's about time. It's likely that Europe is already in a recession, but we're not---and there's little reason why we should be, because our exports to the continent are only worth about 4% of our...Read More
By James Schaefer. In today’s Wall Street Journal, the lead editorial discusses the problems of government overspending (The Road to a Downgrade, July 28, 2011). Medicare, Social Security, and Medicaid prove Milton Friedman's thesis: we cannot get something for nothing. There is no free lunch; and indeed, it is quite an...Read More
Budget proposals are coming fast and furious in Washington these days. Most of it is political chatter, but there HAVE been a number of proposals that aspire to responsible government for the long term. Today's top story in that regard is "Cut, Cap, and Balance" which would smooth over some near-term...Read More
In yesterday's Wall Street Journal Senators Snowe and DeMint wrote an opinion piece (subscription req'd) which points out that none of today's budget negotiations offer anything like a long-term cure for the fiscal irresponsibility that has become the norm in Washington, DC. They argue that this goal is best achieved...Read More