It took a real life example to give life to the key difference between the two candidates for president. When Plumber Joe met Barack Obama campaigning in his neighborhood, Joe asked the would-be president, why do you want to tax my small business? Actually, more precisely, Joe wants to buy the plumbing business he has worked at, and Obama wants to raise taxes on it, and Joe asked Obama, why? At first, Obama equivocated and mumbled something about getting some tax breaks to offset the tax hikes. When Joe refused to buy into that sleight of hand trick, Obama fessed up. Obama admitted that he wanted to spread the wealth around. In other words, he said that Joe would be making too much money, so Obama wanted to take from him and give to someone else.
Why would Obama want to do that? Because, unlike Plumber Joe, who has a real job, Obama’s career experience came as a “community organizer” (when he was known in Chicago as Barry). Taking money from people and giving it to others is what community organizers do. Barry the Community Organizer now wants to organize a big community, of over 300 million people, and he wants to keep spreading the wealth around. Community organizers like to do that, because they like to get the credit for being compassionate and generous, compassionate and generous handing out other people’s money.
Joe has worked hard as a plumber. Joe has saved and prospered. Now Joe wants to own his own business and provide work for other employees. The employees, these plumbers, would provide plumbing services and get paid by their customers. Barack Obama wants to take some of that money—O.K., a lot of that money—and spread it around to people who would get their money from Barack, people who have not been as “lucky” as Plumber Joe.
Lucky? My guess is that it was not luck that made Joe work hard over the years and save his money to be in a position to own a business and provide real jobs to other people. Under a President Obama, Joe and others like him would become unlucky.
John McCain has been trying to point out for weeks that the change offered by Barack Obama is a big time return to the tired old tax and spend politics of the big government politicians. John McCain is not the most eloquent campaigner, and the mass media has been doing its best to bury his message anyway. McCain finally found a real life example, and that is the most eloquent statement of all. At the last national debate, on a stage that the mass media could not ignore, McCain introduced us to Joe the Plumber (who by the way did not ask for all the attention and is a bit embarrassed by it), and McCain asked, why raise his taxes? Why raise anybody’s taxes going into an economic downturn?
If you do not raise the taxes, you cannot keep spending other people’s money and winning praise for your compassion and generosity. And that is the point of this election.
Thursday, October 16, 2008
Sunday, October 12, 2008
Of Joy and Prayer
According to my own experience—and others have given similar reports—the most fun, pleasure, and joy in this world come from the presence of the Holy Ghost. That influence enlivens the whole soul: body, spirit, and intelligence.
Some avoid prayer, or pray in a perfunctory manner, because they consider prayer to be boring, work, drudgery. Prayer indeed can be difficult at times, for it calls forth sincerity, faith, and humility, three traits that go against the grain of modern culture. So I will admit that prayer can require work, but I think that boring and drudgery apply only to prayer that is short on sincerity, faith, or humility. Fortunately, those elements are free and within the reach of any willing to apply them. They do take time, and so does effective prayer.
It is well worth the effort to take the time to apply these elements in prayer to the Father, in the name of the Son, Jesus Christ. There are few better ways to invite the presence and influence of the Holy Ghost. When that is understood and acted upon, prayer can become the most enjoyable activity in this life.
I recall a memorable recognition of that fact, when accompanying the missionaries who were teaching the gospel to a friend of mine. This friend had known some significant experience with drug abuse. The influence of the Holy Ghost was present in that discussion, felt by all four of us. The joy of that presence was noted by my friend with these memorable words: “This is better than drugs.” He was right.
Some avoid prayer, or pray in a perfunctory manner, because they consider prayer to be boring, work, drudgery. Prayer indeed can be difficult at times, for it calls forth sincerity, faith, and humility, three traits that go against the grain of modern culture. So I will admit that prayer can require work, but I think that boring and drudgery apply only to prayer that is short on sincerity, faith, or humility. Fortunately, those elements are free and within the reach of any willing to apply them. They do take time, and so does effective prayer.
It is well worth the effort to take the time to apply these elements in prayer to the Father, in the name of the Son, Jesus Christ. There are few better ways to invite the presence and influence of the Holy Ghost. When that is understood and acted upon, prayer can become the most enjoyable activity in this life.
I recall a memorable recognition of that fact, when accompanying the missionaries who were teaching the gospel to a friend of mine. This friend had known some significant experience with drug abuse. The influence of the Holy Ghost was present in that discussion, felt by all four of us. The joy of that presence was noted by my friend with these memorable words: “This is better than drugs.” He was right.
Sunday, October 5, 2008
Of Elections and Consequences
Elections have consequences, real, life-affecting consequences. One of the more unfortunate aspects of the mass media attitude toward elections is their approach to them as if they were some kind of game. The running score that they keep of the latest polls, their up-to-date electoral college count, the fixation on who “won” the latest debate, all demonstrate a sentiment that the election is some kind of sporting event, where we all root for one side or another, and when the game is won and the season is over we all go back to business as usual. That is not only wrong, it is dangerous.
After the election in November is over, it will not be back to business as usual. America’s standard of living, our economic welfare, our health, safety, and national security will all be affected. Electing Jimmy Carter meant economic and social malaise, it meant the loss of allies in several parts of the world, it meant civil war in Central America and the rise to power of the Ayatollahs in Iran. It meant a toxic economic brew of high unemployment, high inflation, and high interest rates. It meant increased crime in our cities. It meant an underpaid and undersupplied military, with Navy ships coming into harbor trading ammunition with those leaving port because there was not enough ammunition to go around.
Barack Obama is not quite as good or experienced as Jimmy Carter. His leading economic proposal is a whopping tax in the face of an economic downturn. Presidents Hoover and Roosevelt tried that in the 1930s, which turned a recession into the Great Depression. And Obama lies about his tax increase. He lies that it would not affect 95% of the population. The severe recession that it would cause will affect everyone, even the non-tax payers who are promised a tax cut by Obama.
Obama’s plan for a camouflaged government take over of health care will mean that health services will be provided with the same efficiency of the U.S. Postal Service. That means that sick people will have reduced access to medical services. It means that incentives to develop new medicines and new treatments will melt away. If government runs health care, as Obama wants, that means that political muscle will determine health care priorities rather than patient demand setting the priorities.
Obama’s foreign policies are right out of the Jimmy Carter briefing book. That means betrayal of our friends, appeasement of our enemies, and adventurous use of the military in places and causes that mean little to the national security of the United States. It means preparation always for some other war but inadequate commitment to fight the war we are in (he's eager to send more troops into Afghanistan, but unwilling to win the war in Iraq). It means further design of the next weapons system, but never deployment of it, a return to starving our military of what it needs to do the job with least loss of life and maximum success. It means that the most important issues for the Obama military will be social engineering of the armed forces rather than a focus on their increased effectiveness and efficiency.
Voting in a republic like the United States is a serious matter. It is not a game. It means far more than bragging rights over whether our team won the World Series. It means that we are responsible for our electoral choices, with a full understanding that the people we elect will mean a difference in our lives and the lives of our families. It is a truism that people get the government they deserve. I firmly hope and believe that the American people deserve better than Obama. I know that my children do.
After the election in November is over, it will not be back to business as usual. America’s standard of living, our economic welfare, our health, safety, and national security will all be affected. Electing Jimmy Carter meant economic and social malaise, it meant the loss of allies in several parts of the world, it meant civil war in Central America and the rise to power of the Ayatollahs in Iran. It meant a toxic economic brew of high unemployment, high inflation, and high interest rates. It meant increased crime in our cities. It meant an underpaid and undersupplied military, with Navy ships coming into harbor trading ammunition with those leaving port because there was not enough ammunition to go around.
Barack Obama is not quite as good or experienced as Jimmy Carter. His leading economic proposal is a whopping tax in the face of an economic downturn. Presidents Hoover and Roosevelt tried that in the 1930s, which turned a recession into the Great Depression. And Obama lies about his tax increase. He lies that it would not affect 95% of the population. The severe recession that it would cause will affect everyone, even the non-tax payers who are promised a tax cut by Obama.
Obama’s plan for a camouflaged government take over of health care will mean that health services will be provided with the same efficiency of the U.S. Postal Service. That means that sick people will have reduced access to medical services. It means that incentives to develop new medicines and new treatments will melt away. If government runs health care, as Obama wants, that means that political muscle will determine health care priorities rather than patient demand setting the priorities.
Obama’s foreign policies are right out of the Jimmy Carter briefing book. That means betrayal of our friends, appeasement of our enemies, and adventurous use of the military in places and causes that mean little to the national security of the United States. It means preparation always for some other war but inadequate commitment to fight the war we are in (he's eager to send more troops into Afghanistan, but unwilling to win the war in Iraq). It means further design of the next weapons system, but never deployment of it, a return to starving our military of what it needs to do the job with least loss of life and maximum success. It means that the most important issues for the Obama military will be social engineering of the armed forces rather than a focus on their increased effectiveness and efficiency.
Voting in a republic like the United States is a serious matter. It is not a game. It means far more than bragging rights over whether our team won the World Series. It means that we are responsible for our electoral choices, with a full understanding that the people we elect will mean a difference in our lives and the lives of our families. It is a truism that people get the government they deserve. I firmly hope and believe that the American people deserve better than Obama. I know that my children do.
Sunday, September 28, 2008
Of Con Artists and Presidential Candidates
There is something disturbing about Barack Obama. I have been trying to put words to it. It is not merely that I disagree with him on his political prescriptions. There are many people, across the political spectrum, with whom I disagree on political policies and programs, even those for whom I used to work. With only a relative handful of them, however, have I sensed the same disquiet that I feel with regard to this year’s Democrat nominee for President.
After the recent presidential debate between Obama and Republican candidate John McCain I found the right words. Obama is a con artist. Fundamentally, he is acting in a deceptive way to get something from you. He wants you to believe that he has your best interests at heart so that he can get from you your precious vote. He pretends to be what he is not, because if you understood what he is all about, you would not vote for him.
Take, for example, his tax policies. Barack Obama promises a tax cut for 95% of the population. He is offering you a financial incentive for your vote. He is offering to buy your vote. He does not tell you that many of those people for whom he promises a tax cut do not pay any federal income taxes. A tax cut to people who do not pay taxes is just a government hand out. And he usually tries to hide the fact that this hand out to people who do not pay taxes is coming from you. We should not be so willing to believe that you can tax just 5% of the people in order to give a tax break to the other 95%—especially if many of the 95% do not pay any income taxes. You cannot get there, even if you try to take all of the money of the “rich,” and once that is gone what do you do for the next act?
If you own your own business, chances are very high that your business is taxed like an individual and that the revenues for that business will be classified as the “rich” that Obama says he thinks need to pay more taxes. Or perhaps you have some investments in the stock market—half of all Americans do. When those rich companies pay the new Obama taxes, that money comes out of the hides of the companies’ shareholders. Moreover, raising taxes into the teeth of an economic decline is a certain recipe for accelerating the decline. That is what Hoover did, and what Franklin Roosevelt did in order to make an economic recession last for a whole decade (eventually history should recognize that FDR was the worst president of the 20th Century—even if he could talk a good game).
A second example follows directly from the tax example. After he is finished talking about tax cuts (on people who do not pay taxes), Obama starts his litany of very expensive new government spending programs. The price tag for these comes to some $800 billion, give or take a hundred billion dollars. Each program is carefully designed to buy votes. Not only do his tax cuts not work as real tax cuts—taken by themselves—they cannot possibly work in the face of $800 billion of new federal spending.
The third example is really the most prominent. Barack Obama says that this is all “change.” He says you should vote for change, because he thinks that you want change and that his promise for change will get you to give him your vote. If you believe that major tax increases and massive new government spending programs are change, maybe he will succeed in getting many votes. But maybe people will say that they have heard that formula before, and whenever it is applied the nation always becomes poorer.
Barack Obama looks good, talks smooth, promises everything. If he loses this race for President, maybe he could try his hand selling used cars.
After the recent presidential debate between Obama and Republican candidate John McCain I found the right words. Obama is a con artist. Fundamentally, he is acting in a deceptive way to get something from you. He wants you to believe that he has your best interests at heart so that he can get from you your precious vote. He pretends to be what he is not, because if you understood what he is all about, you would not vote for him.
Take, for example, his tax policies. Barack Obama promises a tax cut for 95% of the population. He is offering you a financial incentive for your vote. He is offering to buy your vote. He does not tell you that many of those people for whom he promises a tax cut do not pay any federal income taxes. A tax cut to people who do not pay taxes is just a government hand out. And he usually tries to hide the fact that this hand out to people who do not pay taxes is coming from you. We should not be so willing to believe that you can tax just 5% of the people in order to give a tax break to the other 95%—especially if many of the 95% do not pay any income taxes. You cannot get there, even if you try to take all of the money of the “rich,” and once that is gone what do you do for the next act?
If you own your own business, chances are very high that your business is taxed like an individual and that the revenues for that business will be classified as the “rich” that Obama says he thinks need to pay more taxes. Or perhaps you have some investments in the stock market—half of all Americans do. When those rich companies pay the new Obama taxes, that money comes out of the hides of the companies’ shareholders. Moreover, raising taxes into the teeth of an economic decline is a certain recipe for accelerating the decline. That is what Hoover did, and what Franklin Roosevelt did in order to make an economic recession last for a whole decade (eventually history should recognize that FDR was the worst president of the 20th Century—even if he could talk a good game).
A second example follows directly from the tax example. After he is finished talking about tax cuts (on people who do not pay taxes), Obama starts his litany of very expensive new government spending programs. The price tag for these comes to some $800 billion, give or take a hundred billion dollars. Each program is carefully designed to buy votes. Not only do his tax cuts not work as real tax cuts—taken by themselves—they cannot possibly work in the face of $800 billion of new federal spending.
The third example is really the most prominent. Barack Obama says that this is all “change.” He says you should vote for change, because he thinks that you want change and that his promise for change will get you to give him your vote. If you believe that major tax increases and massive new government spending programs are change, maybe he will succeed in getting many votes. But maybe people will say that they have heard that formula before, and whenever it is applied the nation always becomes poorer.
Barack Obama looks good, talks smooth, promises everything. If he loses this race for President, maybe he could try his hand selling used cars.
Sunday, September 21, 2008
Of Guaranties and Reliance
All around the world people are seeking guaranties against the various risks of life. Borrowers want guaranties that they can stay in their houses, even if they cannot pay the mortgage; lenders want guaranties that they will not lose money on bad mortgages; investors want guaranties against bad investments; people living at the water’s edge want guaranties against floods; and even people making guaranties are looking for guaranties that they will not lose money on the guaranties that they have made to others. Guaranties of health, guaranties of wealth, guaranties of safety and happiness, all seem to be in ever increasing demand.
Perhaps what is most disturbing is that people are not just seeking guaranties, but they are looking for others to pay for them. Rather than relying upon their own resources and performance to obtain guaranties, too many are substituting pleas and moans and whines to wheedle free guaranties from others, especially from the government.
In practice, many of these guaranties will fail. Even guaranties from government are unreliable. I recall when a Senator for whom I worked was faced by an agitated constituent, complaining that a government agency reneged on a promise. There was not anything that the Senator could do about the situation, other than to remind the constituent of an important truth about government: they lied.
There is a source of reliable, faithfully honored guaranties. The ancient American prophet Mormon taught a congregation of Christians, “the way whereby ye may lay hold on every good thing.” The way is through faith on Jesus Christ, by whom people from the beginning of time obtained all things worth having, “and thus through faith, they did lay hold upon every good thing” (Moroni 7:21,25).
Unlike many of the guaranties of men and governments, these guaranties are sure, and they also require some reliance by the individual upon his own efforts in order to qualify. In modern times the Savior Jesus Christ has said, “I, the Lord, am bound when ye do what I say; but when ye do not what I say, ye have no promise.” (Doctrine and Covenants 82:10)
The qualifying requirements are not onerous. They relate directly to the promises sought. For guaranties of goodness, the Lord asks us to be kind. For guaranties of financial wellbeing, the Lord asks us to follow practices of financial prudence. For guaranties of happy family life, the Lord asks that we love and serve each other. That is to say, to obtain the Lord’s sure guaranties, we are asked to rely jointly upon ourselves and upon the Lord.
The result was summed up by the counsel of another ancient American prophet, Helaman, that he gave to his own sons:
And now, my sons, remember, remember that it is upon the rock of our Redeemer, who is Christ, the Son of God, that ye must build your foundation; that when the devil shall send forth his mighty winds, yea, his shafts in the whirlwind, yea, when all his hail and mighty storm shall beat upon you, it shall have no power over you to drag you down to the gulf of misery and endless wo, because of the rock upon which ye are built, which is a sure foundation, a foundation whereon if men build they cannot fall. (Helaman 5:12)
That is a guaranty worth having, and well within the budget of each one of us.
Perhaps what is most disturbing is that people are not just seeking guaranties, but they are looking for others to pay for them. Rather than relying upon their own resources and performance to obtain guaranties, too many are substituting pleas and moans and whines to wheedle free guaranties from others, especially from the government.
In practice, many of these guaranties will fail. Even guaranties from government are unreliable. I recall when a Senator for whom I worked was faced by an agitated constituent, complaining that a government agency reneged on a promise. There was not anything that the Senator could do about the situation, other than to remind the constituent of an important truth about government: they lied.
There is a source of reliable, faithfully honored guaranties. The ancient American prophet Mormon taught a congregation of Christians, “the way whereby ye may lay hold on every good thing.” The way is through faith on Jesus Christ, by whom people from the beginning of time obtained all things worth having, “and thus through faith, they did lay hold upon every good thing” (Moroni 7:21,25).
Unlike many of the guaranties of men and governments, these guaranties are sure, and they also require some reliance by the individual upon his own efforts in order to qualify. In modern times the Savior Jesus Christ has said, “I, the Lord, am bound when ye do what I say; but when ye do not what I say, ye have no promise.” (Doctrine and Covenants 82:10)
The qualifying requirements are not onerous. They relate directly to the promises sought. For guaranties of goodness, the Lord asks us to be kind. For guaranties of financial wellbeing, the Lord asks us to follow practices of financial prudence. For guaranties of happy family life, the Lord asks that we love and serve each other. That is to say, to obtain the Lord’s sure guaranties, we are asked to rely jointly upon ourselves and upon the Lord.
The result was summed up by the counsel of another ancient American prophet, Helaman, that he gave to his own sons:
And now, my sons, remember, remember that it is upon the rock of our Redeemer, who is Christ, the Son of God, that ye must build your foundation; that when the devil shall send forth his mighty winds, yea, his shafts in the whirlwind, yea, when all his hail and mighty storm shall beat upon you, it shall have no power over you to drag you down to the gulf of misery and endless wo, because of the rock upon which ye are built, which is a sure foundation, a foundation whereon if men build they cannot fall. (Helaman 5:12)
That is a guaranty worth having, and well within the budget of each one of us.
Sunday, September 14, 2008
Of New Scripture and Modern Prophets
Some critics of The Book of Mormon and of modern revelation cite Revelation 22:18,19 as warning against any additional scripture beyond the Bible. Those verses read as follows:
For I testify unto every man that heareth the words of the prophecy of this book, If any man shall add unto these things, God shall add unto him the plagues that are written in this book:
And if any man shall take away from the words of the book of this prophecy, God shall take away his part out of the book of life, and out of the holy city, and from the things which are written in this book.
This scripture is clear, and it is important to all of us. There are, however, many things wrong with the argument of those who would draw upon this passage to silence the God of the universe and to quash divine scripture—whether ancient or modern—of which they might not approve.
First of all, it should be pointed out that the Lord through Moses said a similar thing way back in Deuteronomy 4:2:
Ye shall not add unto the word which I command you, neither shall ye diminish ought from it, that ye may keep the commandments of the Lord your God which I command you.
This passage of scripture is also clear, and the same principle is as important to us today as it was to the ancient people of Israel. It is the same principle that the Lord spoke through John: no man is authorized to take it upon himself to alter the word of God.
It seems absurd to think that these passages mean that the Lord must be muzzled and that nothing can be added to the canon of scripture. That would make for a very short Bible--not only nothing after Revelation (which was not the last book of the Bible to be written), but nothing after Deuteronomy.
That must have been clear to the early saints in the decades following the Savior’s ascension into heaven, the ones who put the Bible together many years after the Revelation of John was written. It was these who chose to include in the Bible parts of the New Testament written after the Revelation of John.
Second, how could the misinterpretation of Revelation 22:18,19 be applied to object to The Book of Mormon, since most of The Book of Mormon was written in centuries before John wrote Revelation? Would this misinterpretation apply to any other ancient records of the word of God that might be discovered? Much better, it seems to me, to rejoice at receiving more of the word of God.
Which brings me to the real meaning of these passages in Revelation and Deuteronomy. It is also the plain reading of the language. Both of these passages emphasize the principle that man should not add to or take away anything from the word of God. They say nothing against God adding to His own word if He chooses to do so. It would be pretentious, if not blasphemous, to assert that God could not add to His own word.
If, then, man is prohibited from adding to the word of God, but God is not prohibited from adding to the scriptures, how would God do it? He would do it the same way that He gave us Deuteronomy and Revelation and all of the scripture that He has revealed since. He would act through “holy men of God”, as Peter explained, who reveal the word of God “as they were moved upon by the Holy Ghost.” (2 Peter 1:21) Who would presume to deny such inspired utterances?
It was exactly through such inspired men that the Bible was written, as was The Book of Mormon. In this same way, God speaks to man and adds to His scriptures in modern times.
For I testify unto every man that heareth the words of the prophecy of this book, If any man shall add unto these things, God shall add unto him the plagues that are written in this book:
And if any man shall take away from the words of the book of this prophecy, God shall take away his part out of the book of life, and out of the holy city, and from the things which are written in this book.
This scripture is clear, and it is important to all of us. There are, however, many things wrong with the argument of those who would draw upon this passage to silence the God of the universe and to quash divine scripture—whether ancient or modern—of which they might not approve.
First of all, it should be pointed out that the Lord through Moses said a similar thing way back in Deuteronomy 4:2:
Ye shall not add unto the word which I command you, neither shall ye diminish ought from it, that ye may keep the commandments of the Lord your God which I command you.
This passage of scripture is also clear, and the same principle is as important to us today as it was to the ancient people of Israel. It is the same principle that the Lord spoke through John: no man is authorized to take it upon himself to alter the word of God.
It seems absurd to think that these passages mean that the Lord must be muzzled and that nothing can be added to the canon of scripture. That would make for a very short Bible--not only nothing after Revelation (which was not the last book of the Bible to be written), but nothing after Deuteronomy.
That must have been clear to the early saints in the decades following the Savior’s ascension into heaven, the ones who put the Bible together many years after the Revelation of John was written. It was these who chose to include in the Bible parts of the New Testament written after the Revelation of John.
Second, how could the misinterpretation of Revelation 22:18,19 be applied to object to The Book of Mormon, since most of The Book of Mormon was written in centuries before John wrote Revelation? Would this misinterpretation apply to any other ancient records of the word of God that might be discovered? Much better, it seems to me, to rejoice at receiving more of the word of God.
Which brings me to the real meaning of these passages in Revelation and Deuteronomy. It is also the plain reading of the language. Both of these passages emphasize the principle that man should not add to or take away anything from the word of God. They say nothing against God adding to His own word if He chooses to do so. It would be pretentious, if not blasphemous, to assert that God could not add to His own word.
If, then, man is prohibited from adding to the word of God, but God is not prohibited from adding to the scriptures, how would God do it? He would do it the same way that He gave us Deuteronomy and Revelation and all of the scripture that He has revealed since. He would act through “holy men of God”, as Peter explained, who reveal the word of God “as they were moved upon by the Holy Ghost.” (2 Peter 1:21) Who would presume to deny such inspired utterances?
It was exactly through such inspired men that the Bible was written, as was The Book of Mormon. In this same way, God speaks to man and adds to His scriptures in modern times.
Monday, September 8, 2008
Of Borrowing and Saving
The basic rule is, if you are not already saving, then you are not ready to borrow. This may sound paradoxical, but it is the only safe way to approach borrowing.
You may wonder, if I have savings, then why would I borrow? That question may be answered in any number of ways. Asking it suggests some lack of understanding of the proper purpose of borrowing.
The proper purpose of borrowing is to manage your income. You should never borrow to spend beyond your income.
Most people receive income in lumps, like once a month or twice a month. Expenses do not always behave themselves that way. First, there are the every day expenses, such as for food, transportation, and a wide range of miscellaneous minor expenditures that quickly add up. Then there are other expenses that occur monthly and may more or less happen at about the same time as your income. A third category is the big expenditure, that may come once or twice a year, such as tuition, taxes, major purchases, insurance premiums. Since the timing of our income and outgo often do not line up, we use borrowing to help bring the two into line.
For example, the tuition is due in September, but you plan to pay for college by working through the school year. A student loan or other borrowing arrangement with the college can line your income up with the expense.
Another example might involve a big appliance. Your refrigerator breaks down and you need a new one. You may not usually have several hundred dollars of unallocated income available in any one month to pay for the new refrigerator, but you likely will over the course of a year. Borrowing lets you draw that income from the course of the year into your current month and match it against this large purchase needed today.
Here is a bigger example. You need a new car, both for family transportation and perhaps even for travel to work. Very few people have enough ready income to buy the new car with what will be received in any one month. Most people, though, can draw upon funds available from their income over the course of a few years to pay for the car, and borrowing is the tool that they can use to do that.
Of course, this borrowing from the future to pay for something today can be abused. There is a natural temptation common to man to seek gratification today and worry about tomorrow’s problems tomorrow, even while causing them today. Two things can help counter this potential for abuse. One is interest, and the other is saving.
Interest is what we pay for borrowing. While rewarding the lender, it is a penalty against anyone who borrows in order to spend beyond his income. As you spend beyond your income, the interest mounts. In the end, it will bring down the abuser once the abuse has gone too far and gets out of hand.
Saving is a more benign and effective check on the impulse to borrow in order to spend beyond income. If you are regularly saving, you are doing something even more important than preparing for the future and reaping the rewards from lending to other borrowers. By definition, if you are saving, you are living within your income. You are taking part of your income and putting it aside. That discipline is what is needed to prevent you from using borrowing to exceed your income. You have a proven practice of spending less than you earn.
That is why I say that if you are saving, then you are prepared to borrow, and if you are not saving, then you are either living right on the edge—spending your income as fast as it is received—or you are going beyond, borrowing to spend beyond what you earn, and that leads to trouble. Then you will be spending to consume something that you did not earn and do not deserve. The eventual price for that is loss of freedom, as you must in the future consume much less than you earn in order to satisfy the debts.
You may wonder, if I have savings, then why would I borrow? That question may be answered in any number of ways. Asking it suggests some lack of understanding of the proper purpose of borrowing.
The proper purpose of borrowing is to manage your income. You should never borrow to spend beyond your income.
Most people receive income in lumps, like once a month or twice a month. Expenses do not always behave themselves that way. First, there are the every day expenses, such as for food, transportation, and a wide range of miscellaneous minor expenditures that quickly add up. Then there are other expenses that occur monthly and may more or less happen at about the same time as your income. A third category is the big expenditure, that may come once or twice a year, such as tuition, taxes, major purchases, insurance premiums. Since the timing of our income and outgo often do not line up, we use borrowing to help bring the two into line.
For example, the tuition is due in September, but you plan to pay for college by working through the school year. A student loan or other borrowing arrangement with the college can line your income up with the expense.
Another example might involve a big appliance. Your refrigerator breaks down and you need a new one. You may not usually have several hundred dollars of unallocated income available in any one month to pay for the new refrigerator, but you likely will over the course of a year. Borrowing lets you draw that income from the course of the year into your current month and match it against this large purchase needed today.
Here is a bigger example. You need a new car, both for family transportation and perhaps even for travel to work. Very few people have enough ready income to buy the new car with what will be received in any one month. Most people, though, can draw upon funds available from their income over the course of a few years to pay for the car, and borrowing is the tool that they can use to do that.
Of course, this borrowing from the future to pay for something today can be abused. There is a natural temptation common to man to seek gratification today and worry about tomorrow’s problems tomorrow, even while causing them today. Two things can help counter this potential for abuse. One is interest, and the other is saving.
Interest is what we pay for borrowing. While rewarding the lender, it is a penalty against anyone who borrows in order to spend beyond his income. As you spend beyond your income, the interest mounts. In the end, it will bring down the abuser once the abuse has gone too far and gets out of hand.
Saving is a more benign and effective check on the impulse to borrow in order to spend beyond income. If you are regularly saving, you are doing something even more important than preparing for the future and reaping the rewards from lending to other borrowers. By definition, if you are saving, you are living within your income. You are taking part of your income and putting it aside. That discipline is what is needed to prevent you from using borrowing to exceed your income. You have a proven practice of spending less than you earn.
That is why I say that if you are saving, then you are prepared to borrow, and if you are not saving, then you are either living right on the edge—spending your income as fast as it is received—or you are going beyond, borrowing to spend beyond what you earn, and that leads to trouble. Then you will be spending to consume something that you did not earn and do not deserve. The eventual price for that is loss of freedom, as you must in the future consume much less than you earn in order to satisfy the debts.
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