From the little household budget of a thousand dollars a month to a small business with millions a month to a Corporation with billions a month to a nation with hundreds of billions a month, everyone makes hard choices.

An economy is not fair, not equal, and not even efficient, when you actually look deeper at it. Sure you can use plots and algorithms to figure out general Alphas to Delta trends that makes things easy to project and look smooth on the eyes, but human reasoning is not always rational, nor is long term planning. The problem with modern budgeting is that we make "assumption" and try to live by an "assumption" with "accuracy" being the quality indicator. Problem with projections, you can't predict the future without actually interfering with your operations or current expenses.

I want to buy a new computer right now, but do not want to pay financing over a long period of time. I shelled out $1,000.00. That's a personal finance decision, but it will also affect the future spending for the next few months. I need to save money for Christmas shopping in November, so in September and October, I am spending less on food products. Less meat and vegetables, more peanut butter and bread. I am also cutting out on my favorite treat, a Starbucks Mocha blend coffee.

Suppose others do the same, Starbucks will register a lower than expected monthly income statement and it starts to worry their senior management. They fear they cannot meet their budget "assumptions", so they choose to close down a few shops to reduce overhead costs. For them, they have to maintain profitability to stay in business and even meet obligations without having to dig too deeply into their bank loans and financing options.

Since Starbucks is closing down shops, local government are losing property taxes. They are worried about whether they can keep up their obligations towards law enforcement, teachers, and city workers. They start to panic a little as they cannot exceed their budget "assumptions", because they have no cash to work with and lending options are not great for municipal loans. They start firing people.

Around now, the State and Federal government is supposed to be getting their estimated income taxes for quarterly and normal payroll withholding. As Starbucks has cut down on workers and local government is cutting people, they are collecting less money. Since the federal government has an obligation to the states, they are going to face variances from people, business, and states.

Maintaining a budget is not easy, nor is it simple for any person or group. Living without a budget runs the risk of losing everything, but living with a budget restricts your choices to only methods of reduction in order to meet "budget".