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Where is The Change? How to cut Spending.

Today on the show we talked quite a bit with the listeners about the financial trouble we are in.  In our Homes, our State and in our Country.  Now I will leave your homes up to you.   But as far as our Government goes, we are all in this together. Every time an election comes along all you hear about is how we need to change.  Both sides of the isle say it. “The government doesn’t work anymore.; We can’t keep doing the same things that got us in trouble in the first place;  The people have spoken and have demanded we do things differently.”  Yet, nothing changes at all. Why?

The truth of the matter is no one really wants change.  Ever. We are creatures of habit instinctively.  When we find something that works we keep it as long as we can, we even hold onto its dying virtue long after a better way has come to be.  I can still remember how many people held onto their typewriters because word processors would never last and they just didn’t have the same feel, or sound.  Change is uncomfortable at best and really sometimes downright hard. So why do we do it?  Simple, incentive.  Incentive to change is the necessary step to make it happen. They say you should be wary of change for the sake of change but I believe when it’s needed, you’ll know it.  And I think we can agree that we all know we need  it, now.

I could probably write a book about the changes needed in our government and how difficult it would be to really accomplish a real change without major reforms to the way we elect our politicians , how we evaluate their performance and even the current two party system.  I wont, right now.  ( I know that made you happy.) What I will do is try to offer a couple of ideas that may make the hardest changes easier to take.  Let’s start with what we all can agree on, we need to make cuts in spending.

Nathaniel Brooks-Pool, Getty Images

When it comes to cutting the problem is always the same. “Not in my back yard”.  Every one agrees to the need to cut,  but never on the things that directly effect them.  But think of it like a business. If the cost of operating were more than profits, the business is going to fail. It’s just that simple. So the first thing that has to be understood from the top to the bottom of the ladder is that , if we EVERYONE doesn’t feel a little pain from a few sacrifices, EVERYONE will fell a lot of pain from being without a job.  SO, if we need to cut expenses by 5% over all, this is how I would begin the process.

First explain in no uncertain terms to all the employees why we these changes are necessary. While it is true that no one likes change or sacrifice, they certainly don’t like it when they don’t understand why it is happening,(incentive: keeping our jobs)  or what the long term goal for the company is. ( incentive: company growth) Next you get together with all the Directors and you tell them to seek out the waste. Really look at how things are being done and try to find a way to cut expenses. For every dollar they cut from the their annual budget, 15% goes back into their annual budget and 10% goes directly back to that department in, discretionary funds.  Meaning bonus money, for that director and his employees. (incentive: money) The company then uses the other 75% towards cuts. I am sure that with an incentive to put money directly in one’s pocket you would be amazed at how willing to change they really are. And like all things , I believe it is better going from the bottom up, not the other way around.

So let’s look at this in a governmental way.  Every school has to cut their budget by 5%.  Everyone in the school works together to make cuts. For example, someone figures out that the school can save a ton of money by switching from traditional textbooks to E -Textbooks (Yes they do have them).  Or the transportation department realizes that they can cut gas costs by 10% by switching to a different company and not running the air conditioners in the summer. The cafeteria realizes that switching back to plastic trays and dishes, saves money over buying paper and Styrofoam products for serving, or vice -versa.  And in the extreme cases, yes I guess, with pitching in and consolidation,  we can still get a quality job done with one or two less employees.  Now in this example, for every 100 thousand dollars the school saves,  15 thousand goes into their budget the next year ( over what it is this year plus 3% cost of living) to be used how they see fit. And 10 thousand dollars goes into bonuses. Not a bad deal, especially when you consider the alternative is to just get 5% less and just deal with it.  Incentive. After this process is complete, if the 5% goal is not met, it is simply taken evenly ( by percentage) out of payroll. Starting at the top and working down.  If you were making 500 dollars a week and the company needed a 1% across the board payroll cut, you now make 495 a week.  Company saved.

Without incentive no one will take the time , energy,  or undergo the possible pain of change.

It’s one thought , if you have any please share them.  Maybe Governer Cuomo and President Obama read my blog.

God Bless.

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