Historic Budget Makes A Bold Point

Definining a "budget" and shedding some light on today's budget crisis with some historic perspective.

From 1880-1929, wealthy New Yorkers benefiting from the Industrial Revolution spent their fortunes building lavish summer mansions in Newport with seemingly unlimited budgets. 

Budget. The word budget comes from the Old French word bouge, meaning pouch or small bag with its contents. Long before the days of credit cards, my grandfather used to keep household money organized in a hidden pouch ...

My grandfather brought home his weekly pay and divided the money into small envelopes he kept in the pouch. One envelope for the heating bill, one for mortgage payments, one for groceries, one for vacation savings, and so on. He accounted for every penny and every penny counted. He bought neither anything extravagant nor anything he could not pay for with cash. The mortgage was the only debt he carried. That was how most families managed their money in the 1930's and earlier...

Historic perspective continued... http://netwalkri.com/CLIFF_WALK.html

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Mutato August 21, 2012 at 07:58 PM
Interesting story. I was confused at the graph/photo above because they are not representing the same data. What was the debt for 1910, for example? Trying to understand the deficit versus total debt to really compare the 100 years.
Wendy Fachon August 22, 2012 at 12:11 AM
Good question, Mutato. 3.8 - 2.2 = 1.6 trillion versus 18 million deficit. 88,889 times more debt today, if that means anything. I don't believe the government had debt back in 1910, probably just payables outstanding. Someone please correct me if I am wrong.
Mutato August 22, 2012 at 06:21 PM
Well, we've had almost 100 years of "deficit creep" to contend with now. 1910 was a very different government and country. Think of all the years we've had a small deficit (or large) and we now see how that compounds into the mess we have now. Here's a good read: http://www.scpr.org/programs/patt-morrison/2011/07/25/20022/the-history-of-american-debt-when-did-we-first-bor/
Wendy Fachon August 23, 2012 at 03:08 PM
Mutato, thank you for recommending the link and for enlightening me on the history of U.S. debt. Lots of blame to go around, starting with the military-industrial complex, which seems to get more and more complex. This morning, my husband, Dean, and I had breakfast at T's. The receipt totaled $22.21, which is funny because of something that happened to me almost three years ago and how it seems to connect with the link you sent me. True story, by the way! What's the message? Can you help me interpret this?... http://www.netwalkri.com/2221.html


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