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Savings Account: Politics and Money

Politics. The subject may be boring to some people, but it's important to know what the heck is going on — if for no other reason than that it affects your financial well being.

Think I'm kidding?

Consider this: When Bill Clinton left the White House, the federal budget had a $559 billion surplus. We now have a deficit equal to or greater than that amount. Some estimates place it at over a trillion dollars, in fact.

Why the huge disparity? Despite promises (and reputations) to the contrary, the size of the Federal debt ("the deficit") grew more under the last few Republican administrations (Reagan, Bush I and Bush II) than under all other presidents COMBINED.

In the case of the current regime, the war in Iraq and the new Department of Homeland Security contribute mightily to the huge spike in spending. Though Bush and his compatriots claim fiscal responsibility, what they're alluding to is less spending on "entitlements" and more no-bid contracts to their corporate benefactors, as well as tax cuts for the wealthy.

The Federal prescription drug program is also a new and growing part to the budget, though the drug manufacturers, whose lobbyists wrote the law establishing it, probably aren't complaining.

But the Democrats aren't saints either. The reason for that surplus under Clinton was that the Republican-controlled Congress wouldn't pass most of the administration's bills that called for spending increases. And there are plenty of Democrats in the current Congress who don't have the courage to fulfill their constituents' desires by ending Bush's expensive and deadly war.

Then there's inflation. Remember; a year ago, you probably paid about a dollar for a dozen eggs. Now, eggs are $2.25-2.50 a dozen. Gas will be $4 a gallon long before the end of the year. Much of this inflation is due to the drain on the economy caused by high government spending and the ripple effect on everything else. That's a bit of a simplification, but you get the gist: If you're "bored" with politics or vote for someone based on whether or not they'd be fun to have a beer with, maybe just this once think again.

Though it's called "voting with your pocketbook," it's really about voting with your brain.

Richard Pachter is the MOLI View's Dark Horse.