What
does that mean to the small business owner?
That is not a
misprint! In the minute it will take you
to read this article (better read fast!), the federal government will spend
over $2 million more than the taxes it takes in. You can easily verify this
information on the Internet. In 2012,
the federal deficit increased another $1.09 trillion dollars. That number is so large that I would like to
break it down to something us normal people can at least start to understand. So here goes—the federal deficit in 2012
increased:
- $1,089,350,000,000 per year ($1.089
Trillion), - $90,779,166,667 per month ($90.78
Billion), - $20,949,038,462 per week ($20.95
Billion), - $2,992,719,780 per day ($2.99 Billion),
- $124,696,658 per hour ($124.70 Million),
- $2,078,278 per minute ($2.08 Million), and
- $34,638 per second.
And there is no end
in sight. The federal deficit is
projected to be between $991 billion (CBO in the Washington Times) and $1.33
trillion (www.USgovernmentspending.com), and this is after the huge Taxmageddon tax
increases and the Fiscal Cliff sequester cuts to the defense budget
Now I’m a fiscal
conservative who believes the government should not spend more than what it
brings in. And no, I do not believe we
need to increase taxes! Having been a
trustee on a local school board for six years, I can tell you that there is
tons of government waste in all branches of government. We could cut 25 percent in real costs from
every single governmental agency without even trying. The waste is just mind-boggling!
How do I know?
Simple—it’s not their money!
If you don’t
believe me, try a little experiment. Pay
your kid or your neighbor’s kid to work for you on the weekend. Then take them to the store. Watch how much more careful they are spending
the money that they had to earn with hard work than they are with money you
give them. That’s how the politicians
and government workers are with our money.
They just don’t care as much because it’s
not their money.
Honestly, President
George W. Bush just drove me crazy with his spending deficits during his eight
years in office. In fact, I was inclined
to agree with then-candidate Obama when he said in 2008 that President Bush’s
deficits were unpatriotic.
Well, President
Bush was an amateur compared to how fast President Obama and his cronies in the
Democratic Senate are spending our money, our kids’ money, and our grandkids’
money! Study the chart below closely,
and you will see that the deficit grew by over $2 trillion under President
Bush. Sickening! But it
grew by over $5 trillion under President Obama.
If President Bush
was unpatriotic, than President Obama is a traitor to our country!
Yes, the
Republicans have controlled the House since 2010, but they have had very little
effect on the budget. Why? Because they are spineless! They know the American voting public really
doesn’t support any budget cuts that might affect them or anyone they know.
What
does the deficit mean to the small business owner?
Most small business
owners will just shake their heads and try to ignore the deficit, because the
numbers are just so ridiculously large that they feel there is very little they
can do. But this extreme deficit
spending will have, and I argue is already having, a very negative effect on
small businesses. History indicates that
the following are the most likely outcomes of this excessive spending:
- Increased inflation, especially for
food, fuel, and any imported goods. What we have experienced so far is just a
warm-up to the main event—especially with the feds printing money again under
QE3 (Look it up if you don’t believe me.) - Increased interest rates, as bond purchasers
perceive a higher risk. - Increased taxes—on the federal
government level, as it tries to keep the spending levels the same; and
also at the state and local levels, which will be dealing with the effects
of decreased funding from the feds.
Just Google “Taxmageddon” for Round One. - Increased audits and collection efforts
by all levels of government, which will be trying to increase revenues
without increasing tax rates. - Reduced credit for business expansion
and growth. The federal government’s
increased borrowing will continue to suck investor funds that otherwise
could go to small businesses in order to cover its excessive spending.
So what should the small business owner be doing now to prepare?
- Review all current costs and look for
ways to decrease them but not affect customer service. - Improve your business systems in order
to accomplish more work with fewer staff. - Train and cross-train your employees. Again, this will help you accomplish more
with a smaller staff. - Know your cost of providing your product
or service and review it monthly. You
will need to react quickly to changing product prices. - Review your pricing and your
competitor’s prices constantly.
This is vital during rapidly rising prices. - Improve your marketing so that you reach
more prospects, convert more of the prospects to customers, retain more of
your current customers, and get more referrals from them. - Keep in contact with your business
customers. They will be price
shopping in order to try to stay profitable. You don’t want to lose customers over a
small amount. Before you cut
prices, resell the benefits you bring to them and how you are really
helping them save money.
Finally, pray that
the American people and the politicians in Washington start acting responsibly soon.
Oh—and only vote
for politicians who understand how serious the deficit is, and how important
reducing it is to our country’s freedom and survival. Then hold their feet to the fire. Keep firing them until the Washington
politicians get the message that you are serious.