Wednesday, March 10, 2010

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

Budget deficits: this time, it’s personal


They call it “news” for a reason.

This might be why persistent budget deficits on the federal, state and local level seem to attract so little press – there’s nothing at all “new” about them.

It’s a story from my kindergarten classroom, my first day of middle school and my college commencement ceremony. And it’s a problem that is not going to go away.

Starting from the smallest municipality on upward, it reads like a balance-sheet gone haywire, starting with the city of Vancouver (an estimated $10 million over two years); the state of Washington (revised figure, $2.8 billion); and the federal government (more than $12 trillion, a number regularly updated via the Peter G. Peterson Foundation’s National Debt Twitter feed, found here).

It’s easy to blame the government, including the politicians we elect and reelect year after year, but in reality, our nation’s debt problem is one with roots that stretch to the bedrock financial institution of our society – the family budget.

That’s right: the Great Recession’s catastrophic effect on almost every sector of the U.S. economy was due to questionable decision making, not just in places like Washington D.C. and Olympia, but at many a kitchen table as well.

With that in mind, I called a few members of Southwest Washington’s business community this morning to see what had changed – or not changed – in our approach to their household budgets since the financial crisis hit more than two years ago.

For Roch Manley, AIA at Manley Architects, the recession meant that at least one personal home-improvement endeavor would have to be put on hold, indefinitely. “Boy, I’ll tell you the economy put the brakes on that,” he said.

Manley also described a shift in thinking that went beyond the deferment of household projects, taking the form of an increased consciousness about the limitations of his own budget that perhaps hadn’t been there before.

That shift was echoed by Sean Guerrero of Creative Computer Solutions, Inc. in Vancouver. “We have been more cautious, definitely,” Guerrero said.

Though Guerrero said he still went on a trip to Hawaii in the past year, he was much more conscious of his budget while he was there – an act of “measured indulgence” that many people, including this newspaper editor, are very familiar with.

But as to the larger question of mounting debt at the local, state and federal level, what relationship, if any, exists between the budget decisions made by individuals and those made by government?

I look at possible answers to that question this way: If we expect government to embrace the philosophy of fiscal austerity, lack of wastefulness and increased productivity, our first order of business should be to embrace those same tenets ourselves.

However, much like addressing the budget deficits currently plaguing the public sector, it’s something much easier said than done.

2 comments:

aj said...

Great piece. Its our fault for electing irresponsible do-gooders who live beyond their means. Businesses hold back, cause we are unsure about tomorrow. Are you blaming our hesitancy to spend? Of course, we are all hesitant. No surprise.

Jake Engle said...

Paul, you might also mention that competitive consumption and wasteful spending doesn't truly make individuals happier. Nor politicians - they all look unhappy to me.

We need to keep perspective. Our grandparents were quite happy without many of the things we feel entitled to have.