While Washington, and the media covering it, are having the typical partisan meltdown over Obamacare and the government shutdown, the big elephant in the room is being missed. The government is shutting down, not because of a fight, but because it doesn’t have money to fund its operations.
The reality is that the U.S. is the wealthiest nation in the world, by far. With this wealth and with the government being the largest employer in the entire country, the fact that we would be in the position to not have money to continue operations is preposterous to think about once, let alone time and time again. It underscores the complete and total lack of financial controls and management in the U.S. government.
But while the government started ceasing operations on Tuesday in various function, you know who didn’t shut down? Entrepreneurs. Businesses and entrepreneurs didn’t stop what they were doing because they have accountability and responsibility to their stakeholders. Entrepreneurs and their companies have to bear the consequences of their actions. Politicians seem to forget that they are accountable to the American people that they represent. It seems as though they are more interested in scoring political points than creating solutions to benefit Americans.
The government has run out of money and will hit its borrowing limit in just about two weeks. Despite the U.S. government taking in more than $2.5 trillion in tax dollars per year, Congress refuses to budget responsibly.
In fact, they consistently pass budgets without any financing attached to them, meaning they have no idea where the money for their overspending is coming from - even while they continually decide to spend above their tax collections. They just assume they will borrow to cover the overage. That has put us $17 trillion in debt and has us spending more than double on financing past overspending in the form of interest payments than we do for education, an investment in our future.
Businesses don’t have the luxury of budgeting without financing. In fact, most debt financing for entrepreneurs requires a personal guarantee. That means, if their business can’t pay it back, the entrepreneur is personally liable for the debt.
Politicians seem to think they can budget for whatever they would like because they are spending OPM - other people’s money.
Without some real skin in the game from politicians, there at least needs to be some level of accountability. A common sense legal requirement to require financing to be in place for any budgets or spending measures would start to work towards this. Even better, given our financial situation, would be to disallow any spending above tax collections, while also maintaining a tax environment that can foster desperately needed growth.
Too many people want to argue that the government is not a business and therefore analogies regarding running it like one are moot. But when you take in more than $2.5 trillion each year and employ more individuals than any other business in the U.S., the government literally cannot afford not to act like one.
Businesses work in the best interest of their stakeholders. It’s time for Congress to work in the best interest of their stakeholders - the citizens of America - as well.
Feature Photo Credit: AP Photo/The Star Tribune, Elizabeth Flores
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