Debt Consolidation USA Shares Valuable Tips To Curb Spending In Sale Events

by Shelton on February 26th, 2015

filed under Debt Consolidation

Debt Consolidation USA recently shared in an article how consumers can help their budget especially in the face of sale events. The article aims to help and educate consumers when deciding if a sale is enough justification to spend.

Philadelphia, PA (PRWEB) February 07, 2015

Debt Consolidation USA recently shared in a published article how consumers can help their budget especially in the face of sale events. The article titled “Tips To Make Smart Spending Decisions During Sale Events” aims to help and educate consumers when deciding if a sale is enough justification to spend.

The article starts off by pointing out that if spending goes beyond the budget, it is a good indication that a consumer is not making smart spending decisions. This is not an acceptable practice because overspending can put a person’s financial goal in a plateau or even worse, on a spiral down to unmanageable debt.

There is no excuse for people to spend more than what their budget allows except only during emergencies like someone getting hospitalized or an emergency repair at home that cannot be postponed like a busted heating system during winter. A nice suit or a flashy red pair of stilettos are not considered an emergency.

To prevent overspending especially during sale events, the article shares some tips starting off by asking consumers think through the purchases. They need to be able to understand if the item on sale is something they really need. This is especially true if the purchase is not within budget.

The article also shares that consumers need to know if the sale is a one-time basis or if it will be recurring every month especially during paydays. If it is something that happens often, consumers can just try to budget the item in the next sale event. By that time if it is something that they really need, they can buy it.

Another tip that the article points out is understanding if the purchase of the item is more important their saving goals. An unexpected hit in the budget because of an unplanned purchase in a sale event can have negative effects in person’s long term saving goals.To read the full article, click this link: http://www.debtconsolidationusa.com/personal-finance/tips-to-make-smart-spending-decisions-during-sale-events.html

For the original version on PRWeb visit: http://www.prweb.com/releases/financially_managing/sale_events/prweb12494326.htm

Contrary to Obama, federal finances aren’t hunky-dory

by Shelton on February 26th, 2015

filed under Finances

According to President Barack Obama, the financial condition of the federal government is hunky-dory.

The deficit is under control. Nothing to worry about. Nows the time to increase taxes on corporations and the rich to fund additional government benefits for the middle class.

Is Obama right, are the finances of the federal government essentially fixed? Not by a long shot.

Obama bases his sanguine assessment on the fact that, under his budget projections for the next 10 years, annual deficits remain less than 3 percent of GDP, a level economists generally regard as sustainable.

But that shouldnt be the end of the analysis.

Under Obamas budget, the annual deficit over the next decade averages around $570 billion. The trend is upwards over time, so thats a warning sign in itself.

Im not one who thinks that the federal government should be completely on a pay-as-you-go basis. Each year, the federal government buys roughly $250 billion in major physical assets. Stuff that has a long life, such as buildings and airplanes. Financing such purchases and spreading the cost to include future taxpayers who will benefit from them is sensible.

That means, however, that Obama proposes borrowing more than $300 billion a year not to finance capital purchases but to pay for current operating expenditures. Thats imprudent and has cumulative consequences.

Right now, the federal government can borrow seemingly without limit at very low interest rates. That presumably wont last forever and, to their credit, Obamas budgeteers dont assume that it will. Obamas budget assumes a return to normal interest rates over the 10-year planning horizon.

The cumulative effect of continuing to borrow significantly to pay for current operating expenses and higher interest rates should be a cause for considerable concern, if not alarm.

Obamas budget projects that the annual interest cost on the national debt will increase from about $230 billion today to a jaw-dropping $785 billion ten years from now. That puts a squeeze on the rest of the budget and makes the federal governments finances highly vulnerable to interest rate swings.

Obamas budget proposes that federal spending increase by an average of 5 percent a year over the next decade. Federal spending would increase faster than population and inflation, and faster than the economy.

Prior to Obama, federal revenues averaged about 18 percent of GDP and federal spending 20 percent. Obama proposes to increase federal revenues to about 19.5 percent of GDP and spending to 22 percent. Not to respond to emergency economic conditions, but as the new norm.

Obamas budgeteers claim that this is necessary to accommodate the increased cost of retiring baby boomers, and there is merit in the claim. Despite proposing a dizzying array of new domestic spending initiatives, the increased spending under Obamas budget does mostly come from entitlements.

But Obamas budget proposes to use up a lot of fiscal headroom without fixing entitlements. And the day of reckoning is getting nearer.

The Social Security disability trust fund will run out of IOUs to cash in 2016 and be unable to pay what is owed in benefits. The same thing is projected for the Medicare hospitalization trust fund in 2030 and the Social Security retirement fund in 2034. Benefit cuts, if nothing is done, will be about 20 percent.

Obama proposes that the retirement fund cover the disability fund deficit. Other than that, he proposes nothing on entitlement reform.

I dont like Obamas proposed tax increases. But if he were proposing them to pay for entitlement benefits, he might have an argument. Increasing taxes to expand domestic programs without fixing entitlements, however, is irresponsible. As is crimping future borrowing capacity by leaving the accumulated national debt, including what is owed to the entitlement accounts, close to 100 percent of GDP.

Even if there isnt the political will to tackle entitlement reform now, the fiscal headroom has to be built to do it when it can no longer be avoided.

If the increase in federal spending were modestly restrained to 4 percent a year rather than Obamas 5 percent, borrowing to cover operating expenses would be eliminated over the course of the decade without Obamas tax increases. Fiscal headroom to tackle entitlement reform would be created.

That ought to be possible.

Reach Robb at robert.robb@arizonarepublic.com.