Record Debt Unsustainable
Our nation's debt is at record levels whether the people of America like it or not. The unsustainable spending practices makes it clear that the current Administration's policies are out of line with their sustainability objectives. Our economy cannot sustain spending at such levels.
Examine the logic of our government budget cuts, the cuts are based on an expanding expense account. For instance, if your company gave you an expense account of $500 per month you would, in most cases, try to stay within your budget. You would also be kept accountable by having to keep a good record of how you spent the money and turn in all of your receipts. Now, if your company told you that they needed to cut expenses next quarter by ten percent, you would make this change in your expense account - deduct $50 from your current budget of $500, which will then give you $450 as your monthly budget for the next quarter.
Our government on the other hand does it something like this. They will decrease spending by 10% by saying that we had $500 in our current budget and for next quarter we have factored in that our expenses will be $600 so we will cut 10% off of that and now we have only $540 to spend. Hmm... still seems like they have more to spend next quarter, but they can say confidently to their constituents that they did cut spending by 10%. With the smoke and mirrors budget accounting practices of our Government, the taxpayer is working more and more to pay for the government's expenses. More taxes equals less money in your pocket alternatively less taxes equals more money in your pocket and everyone else's.
Sustainability and Green Jobs
If sustainability and green ($$$) jobs are important to our Administration and Government they should take into consideration the sustainability of the economy. The pace at which the government continues to grow is unsustainable. A basic principle of sustainability is that you harvest what you need and leave the rest to allow the ecosystem to replenish and sustain itself for the future. If you deplete the resource faster than it can be replaced, it dies or goes on the endangered species list. This is what is happening in our economy. The entrepreneur is becoming an endangered species. Taxes, regulations, cost, etc. are making it extremely difficult for entrepreneurs to open and operate a business. Without "New Shoots" we are losing business and opportunity to countries that encourage entrepreneurs to start new businesses through their policies and practices.
On a positive note, the plight we are in is reversible over time. The answer is to foster the creation of new businesses that are sustainable in the current marketplace. Some will grow and some will close.
Resources will be moved towards their most productive and efficient use. Government policies and taxes should encourage entrepreneurs to create new businesses. If the market is allowed to determine which businesses, products, and services are economically sustainable then jobs will be created, and tax revenues will be generated.
Bizincubators - Inspiring and educating entrepreneurs visit our website at www.bizincubators.com
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Friday, July 29, 2011
Tuesday, July 26, 2011
Confusing Stock Market & Trillion Dollar Debt
The idea of being trillions of dollars in debt doesn't seem to scare our leaders in Washington. Many households have debts that are looming and scary but tiny in comparison. Where did all that money go? Someone spent it. I don't think that our government really has a true budget like a good business or well run household has. If our government was run like a business and audited like one, either the budget would be balanced or there would be a lot of people in prison for fraud and embezzlement. Yet, we can't blame anyone but ourselves, it started with the individual voter and non-voter. Those who don't vote must be included because of their apathy, the system has become the system because we all let it happen. Why don't we ask tough questions and have our representatives show us the evidence of how they are spending our hard earned money.
The stock market is defying logic, but then again, avarice is not known for being logical. Would you pay 40 to 50 times a company's earnings if you were to invest your life savings in say a computer vender down the street. Let's say he claims that his sales went from $10,000 a month to $20,000 a month year over year. He wants to sell you his business so knowing that he made double what he did last year, and your projection of future sales and earnings is for the trend to continue at the same pace, based on analysts estimates the business will make $40,000 a month next year. You quickly take out your life savings and plunk down your $1 million dollars to purchase the business. He walks away a millionaire and you get a business that you know, based on your logic, will be worth $2 million next year and all you have to do is find someone just like you to take it off your hands for a nice gain of $1 million. Easy? Yet, most people wouldn't just buy that business without asking more questions, getting a complete set of audited accounting records, examining future demand and R&D for new products, investigating who their competitors are out there and many other things before they bet their life savings. Still, this happens everyday in the stock market. People put their life savings into the hands of Wall Street money managers and hope for the best.
The way out of this financial roller coaster ride is to get back to business fundamentals. It is simply this, produce something of value, sell it at a profit, save some, reinvest some, and go back to step one. Too many people rely on the government to be the solution to the economy and they don't rely on their own abilities.
I read this quote in the book, "How Privatized Banking Really Works", by L. Carlos Lara & Robert P. Murphy.
"The most efficient organization in the world is not any group of people but a single person. A normal person can conceive a plan, figure out how to carry it out, and communicate the orders to do the task to his faculties instantly, with minimum likelihood they will be misinterpreted... Moreover, an individual who owns his own material, has put up the investment for an undertaking and stands to gain whatever profits arise from the enterprise, must have the greatest incentive to do the job well."
--Clarence B. Carson
Our goal at Bizincubators is to inspire and educate aspiring entrepreneurs, we believe that the solution is right in our own backyards, it is people like you who have a personal dream to become a successful entrepreneur.
js
The stock market is defying logic, but then again, avarice is not known for being logical. Would you pay 40 to 50 times a company's earnings if you were to invest your life savings in say a computer vender down the street. Let's say he claims that his sales went from $10,000 a month to $20,000 a month year over year. He wants to sell you his business so knowing that he made double what he did last year, and your projection of future sales and earnings is for the trend to continue at the same pace, based on analysts estimates the business will make $40,000 a month next year. You quickly take out your life savings and plunk down your $1 million dollars to purchase the business. He walks away a millionaire and you get a business that you know, based on your logic, will be worth $2 million next year and all you have to do is find someone just like you to take it off your hands for a nice gain of $1 million. Easy? Yet, most people wouldn't just buy that business without asking more questions, getting a complete set of audited accounting records, examining future demand and R&D for new products, investigating who their competitors are out there and many other things before they bet their life savings. Still, this happens everyday in the stock market. People put their life savings into the hands of Wall Street money managers and hope for the best.
The way out of this financial roller coaster ride is to get back to business fundamentals. It is simply this, produce something of value, sell it at a profit, save some, reinvest some, and go back to step one. Too many people rely on the government to be the solution to the economy and they don't rely on their own abilities.
I read this quote in the book, "How Privatized Banking Really Works", by L. Carlos Lara & Robert P. Murphy.
"The most efficient organization in the world is not any group of people but a single person. A normal person can conceive a plan, figure out how to carry it out, and communicate the orders to do the task to his faculties instantly, with minimum likelihood they will be misinterpreted... Moreover, an individual who owns his own material, has put up the investment for an undertaking and stands to gain whatever profits arise from the enterprise, must have the greatest incentive to do the job well."
--Clarence B. Carson
Our goal at Bizincubators is to inspire and educate aspiring entrepreneurs, we believe that the solution is right in our own backyards, it is people like you who have a personal dream to become a successful entrepreneur.
js
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