In article , "HeyBub" wrote:
k-nuttle wrote:

You are right a budget is a plan where you have considered all
possibilities with plans for excesses and deficiencies. The reserve
is part of the budget and absorbs the excess and can proved funds to
cover the deficiencies

About the only entities that try to operate with out a budget is the
US government and some states. I believe all of the states with
budget problems do not have the balance budget requirement. All
successful companies work to a budget, and as private entities, must
manage their excess and deficient revenues.

Forty-nine states require a balanced budget. How they get there is
interesting:

* One way is to determine the state's spending requirements then adjust
revenue (i.e., raise taxes) to meet the requirements.

* The opposite (my state) is to calculate how much revenue is expected, then
adjust projected spending to match.


Then there's the approach used by a "balanced budget" amendment introduced in
Congress in, IIRC, the early 1980s: it would have required the President to
submit to Congress an estimate of revenue during the coming fiscal year, and a
spending budget that did not exceed the revenue estimate -- but nothing
required the estimate to be in any way realistic.

A better way, IMHO, would be to require that expenditures in any calendar year
not exceed revenues received during the immediately previous calendar year. No
estimating, no fudging, just the hard numbers. There would, of course, need to
be some means of suspending this requirement during wartime or national
emergency.