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I just saved $500 last night and I’m feeling quite proud of myself. It didn’t take much effort: I simply discovered that my local drug store sells my favorite brand of potato chips (Herr Salt and Vinegar, in case you’re trolling for some change in your life) for $1 less than at the local grocery store where I usually buy my salted snack foods.
At this point you’re no doubt wondering about my unhealthy chip consumption (and my HDL) if this picayune price difference adds up to a savings of $500, but trust me when I declare that I strictly limit my potato chip consumption to one four-ounce bag a week. However, the savings become apparent when I apply the same budget rules as does the U.S. Congress. The lower price at the drug store saves me a dollar each week, or roughly $50 a year, which adds up to a grand total of $500, or enough to finance a weekend trip to New York City, if I were to use the same 10-year budget window that Congress does when it estimates the cost of various activities.
If $500 isn’t enough money to cover my out-of-town weekend, I know of some other savings. For instance, my personal “fiscal year” ends on March 31st, for no good reason. If I delay purchasing some much-needed cleaning supplies, baby food, and children’s clothes until after January 28, the day my credit-card cycle ends, then those purchases won’t be deducted from my bank account until 35 days after the next cycle ends at the end of February, or just after my Fiscal New Year. That’s another $200 of savings I can put towards the trip in my own personal quest to run a balanced budget.
I suspect at this point you’re ready to join the naysayers and point out that delaying purchases a few days doesn’t really save any money at all. What’s more, my $500 in potato-chip savings is based on a whole lot of things that will probably change in the future, such as the relative and absolute price of potato chips at Rite Aid, my desire for the snack, and whether we’ll even be living in our current house (and thus shopping in the same venues) for the next decade.
The observation that I’ve traded some ephemeral, bogus savings to finance some actual spending today is spot-on; it’s also something that we’ve been doing for some time in our own government in order to justify spending money we don’t have or giving tax cuts we can’t really afford.
A trillion-dollar deficit is already big, but we should keep in mind that a decade of budget shenanigans means that there are fewer resources we haven’t already laid claim to in what has heretofore been a bipartisan quest to make the enormous shortfall appear at least somewhat manageable. When the enormous baby-boom generation starts retiring in earnest, we’ll have few tricks up our sleeve to mitigate the costs of their health care and social security payments. Which means we’ll be forced to actually fix these broken systems sooner rather than later.
But it still makes sense to be on the lookout for any budget sleight-of-hand whenever we see Congress negotiating budget “savings.”