No, this is not an Intro to Finance lesson. A economy or budget is a detailed accounting or plan for the expenditure of finite resources. An economy is not simply about money—it’s about how you plan to use what you have. Ideally, this plan will have some sort of focus or orientation. With that explanation out of the way, you can now set yourself apart from that group of ignorant people who say, “In this economy, yada yada yada,” and don’t really understand what the term even means.
Here is an example of a horrible economy: America. Our assets include advanced industry, open market competition, high potential for an educated populace, vast natural resources, and a very open global trade policy. We also have the highest GDP in the world and a government that claims to be a constitutional republic. But how does America allocate funds?
(I know this is a strength and performance blog. This example is merely illustrative and will not drag on, I promise.)
Health and human services consume roughly one-fifth of the budget, yet we have nowhere near any form of respectable public healthcare. I have some of the best insurance available, and, by a LONG shot, my medical bills are my highest expenditure, even though I am perfectly healthy and require nothing more than checkups, sporadic followups, and routine dental maintenance. Half of the free world has public healthcare, but ours is scarcely better than that of a third world country. In some countries in Europe, if an American doctor wants to practice medicine, he or she is required to receive an additional 18 to 24 months of medical school. Medical practice is the third leading killer in our country. We haven’t devised a cure for a major disease in half a century (but, of course, that has nothing to do with the fact that the treatment of “disease” is one of the largest contributors to our GDP). And I haven’t even mentioned our childhood obesity epidemic.
Moving on. Defense also makes up roughly one-fifth of our budget. I know this is a sensitive topic, so let me just gloss over a few purely quantitative points before I slide away from it. Our defense budget is larger than every country in the civilized world combined. China, Russia, and Saudi Arabia are the highest spenders on the list that I would not turn my back on from a military standpoint. Only Russia’s border has any proximity to ours, and it’s been over a century since we’ve experienced any military encroachment. We’ve had no productive military victory since the end of WWII. But defense still comprises a huge budget, and its many classified portions seem to open the door to misappropriation more than any noticeable progress. It looks to me like there is more than a little wiggle room in that budget, especially considering that we don’t pay active-duty soldiers shit, we don’t take very good care of them after they’re done serving, and we have them fighting in places we really have no business, for causes we can’t clarify, at a cost that has no clear justification. Orrrrr, we could actually be an efficient global peace force with a reputation of integrity and be the ones who come to save the day when other countries ask for help.
Social security is another one-fifth our budget. Now, the social security administration obviously has room for improvement, but taking care of our retired citizens is a place where I think we could afford to spend more. We definitely need to do a much, much better job of taking care of them. Maybe we could pawn a couple of fighter jets and lead the world in quality of life for our elderly. Just sayin.
The Department of the Treasury is the next biggest expenditure. Here is a snippet from its budget disclosure: “The Department of the Treasury’s FY 2015 request includes resources to strengthen the U.S. economy and job creation, help struggling homeowners, monitor risks to the financial system, encourage small business lending, protect taxpayers, promote fair and effective revenue collection, fight financial crimes, reinforce the international competitiveness of the United States, manufacture currency, and responsibly manage the U.S. government’s financial resources, among other duties.” I’m not sure if this disclosure is intended to be hysterical or if the Treasury is actually grotesquely underfunded and ill-equipped for the tasks set out for them. Either way, it proves my point about budget quite well.
HUD, Veterans Affairs, and education total around 7%. No, you read that right. They TOTAL 7%. “Other” totals 6%, just to put that number in perspective.
We Americans are not stupid. But in no way are we considered well educated by the rest of the world, so I’m going to wrap up my illustration with the topic of education. With only 3% of our national budget spent on education, we actually have a relatively high expenditure per student. The PISA test, which compares 65 countries in their education performance, shows that 29 out of 65 crushed us in math, and 22 beat us in science “by a statistically significant margin.” Our ranking in scientific achievement has dropped four places from seven years ago. Even Vietnam beat America. The major takeaway is that American kids are getting stupider while the kids in the rest of the world are benefiting from the effort their governments are putting into improvement. Is it purely a financial issue? Absolutely not. And here is where this discussion about budgeting becomes relevant to strength and performance: you spend your resources where your priorities are. We have over a trillion dollars in student debt crushing a generation by holding their future hostage, when taking 3% from our national budget across the board would make our education system free to all students from K through GRADUATE SCHOOL!!! and no sports, music, or afterschool programs would have to be cut. If all congressmen were paid in line with the average income of the country, were eligible for no more than the Social Security benefits the rest of us receive, and were thoroughly vetted and held accountable for all votes cast to those who elected them, not the ones that FUNDED them, then America might be a place with the same integrity it had at the end of WWII.
Budgets are important is my point. In application to the life of my readers, I would like everyone to review their personal economy. How do you allocate your time, money, and resources? Are they in line with the person you want to be? If you were your own country, are you the president you would elect?
If your goal is to get bigger or stronger, are you allocating adequate resources appropriately? As with America, we can see that the amount of money you allocate means little if it is allocated poorly. Russia has the No. 2 military in the world, but is No. 4 in spending. Saudi Arabia is No. 3 in spending, but its military is not in the top 10. What you spend on is more important than how much you spend. I used to buy every new bullshit supplement that hit the market, until I realized that all of my biggest gains came when I could not afford to buy anything but bulk flank steak on clearance and peanut butter for protein. When it comes to achieving goals and making progress, you have to put effort into thinking about how you’re budgeting your resources. Just as I’ve advised you to review your training logs and constantly make all improvements possible, compare want and need. Compare value. Compare efficiency.
We could have the number one public health and education systems in the world in less than five years. We could be innovators in science and technology. We could have an educated public. No, seriously!! We could have citizens who learned to think for themselves, rather than being educated through advertising. An educated public would naturally hold itself to a higher standard and seek to improve all aspects of its country. The prison population would decrease by at least half just through law reform. With the opportunities given to the following generations with free education and social reform, I believe that by the year 2050 we could reduce the U.S. prison system to one single supermax federal prison and one penitentiary per state. We could lead by example with human rights and public integrity. With simple budget reform and greater accountability, we could be the country with the highest standard of living for all, a statistically insignificant unemployment rate, the best education rankings, and the greatest amount of genuine civic pride. We could learn from the mistakes of the past and become a beacon of achievement and progress.
It all starts with the individual. It starts with us. Being an Elite means never compromising integrity but rather constantly striving for improvement. Live your life as an example to yourself. Rule yourself as you would your country. Always remember that what you do with what you have is a much clearer statement on your character than what you do or do not have. In athletics, the Russians have always been formidable opponents on many fields, despite their limited resources, nutrition, facilities, etc. They are always competitive. What they do with what they have is far more economical than how we manage our resources. Having it easy is rarely an avenue to success.
Take an honest inventory of everything you have, both tangible and intangible. Take an honest inventory of what and who you are. Get a clear picture in your mind of what you want to achieve and work backwards. You may have to be more creative or persistent than someone with more resources, but all things are achievable. Get to it.
Leave any comment, question, or suggestion here on the blog or email me at email@example.com if you want to continue this discussion or pursue my online coaching. I would love to hear from you.
“Don’t tell me where your priorities are. Show me where you spend your money and I’ll tell you what they are.”—James W. Frick