I'm a big proponent of personal accountability and leadership accountability. One of the things I live by is the 10 Steps of Accountability. It really defines what accountability is, and where it is missed, and can help you pinpoint gaps that could hinder results.
Our leaders have been extremely unaccountable in recent years, and it is no wonder they are not getting the results they want. It is even less surprising that their leadership and role-modelling has led to a lack of accountability at all levels of individual personal finance. Here are some prime examples of financial unaccountability and how it translates to individual personal finance.
What is a Balanced Budget?
If Congress can't balance a budget, no wonder millions of individual households can't either. Congress hasn't balanced a budget in over a decade, and this spending is just out of control. How do they fund it, through borrowing, of course! However, Congress has the easy power to earn more, which most Americans don't. Congress has the power to tax to cover the bill. At some point, if they don't get things in order, they will have to do just that – raise taxes.
Unlike millions of Americans, Congress can't simply claim bankruptcy and wipe its debts clean. There is a lot more at stake, and it has a lot of options available to repay them, they just aren't politically pleasant. Americans should look at this and think “Hey, I shouldn't do this”, but that is not how leadership works. Congress needs to be a role model for American citizens on responsible budgeting. It is pretty much their only job in Washington!
When Insurance Becomes a Hand-Out
Unemployment insurance was originally designed to be a stop-gap to help people quickly through the transition to the next job. However, it has since become a guaranteed hand-out, and it lasts for almost 2 years! Were you surprised the unemployment rate dropped last week? I wasn't. We are just passing the 2 year mark of extended unemployment benefits, so people have an incentive to get back to work now. It may be in lower paying jobs or different industries, but they are going back.
As an individual, when did it become okay to just accept money for doing nothing? I mean, hey, its a great perk, and I think there are people who truly need assistance, but is it right and fair? Is it being accountable to yourself and your family? I know if I lost my job today, I would take it. It is there to take. However, I also have a solid emergency fund, have networked with others, and have multiple income streams to help me get through any downturns. Essentially, I am trying to be prepared for the unexpected. Why don't most American's take this approach?
You Are Imposing On Me
A lot of people are irritated at ObamaCare, especially the mandatory insurance or be taxed portion. However, every time an uninsured individual goes to the doctor, they don't pay, and I end up covering the cost in my bill. It makes my prices higher! I understand that people get sick and they can't afford care. This may sound harsh, but should they be liable, and not me?
There are a lot of examples of this occurring – not just health care. Take Occupy Wall Street – it is costing millions, maybe even a billion dollars nationwide, to police, clean-up, and monitor their protests and rallies across the country. Who pays for that? The taxpayers! Since I'm a taxpayer, these individuals are imposing on me, and my personal finances. I like free speech, and they should voice their opinions, but they should also pay for their own security and clean-up costs. Not the cities they are protesting in. Once again, financial accountability.
Along with never balancing a budget, Congress loves Americans to spend more than they can afford. They do this by offering breaks to take out debt – mortgage interest deduction, student loan interest deduction, government-backed mortgages and student loans. All of these are areas where our country is getting into trouble on a personal finance level, but the government creates incentives to do it! We are having a mortgage meltdown, and we may have a student loan meltdown in the near future.
Why do people get into these things? Better yet, why do companies take the risk on letting people get into these things? Because there is no risk – the government backs it. It is a great business to be in because the people, and the banks; nobody has to be accountable to the end result. The government set up this unaccountable system!
Readers, what are your thoughts on personal finance and accountability? Should the users pay? If you can't pay, what about debtors prison, like in the 1800s? Would that change the culture?