# News How do we cut spending? (US)

#### turbo

Gold Member
This is something that Government clearly doesn't understand - or we wouldn't have a $14Trillion national debt growing at OVER 10% per year ongoing for decades - AS IT'S PLAN. The subject of this thread is "how do we cut spending" - my response is account for EVERY dollar. It has now become acceptable for politicians to round bills to the nearest hundred-billion and talk in terms of trillions - it seems just a few years ago$1Billion was a lot of money - now it's a waste of a politicians time to discuss? (IMO)
One reason for our excessive spending IMO is that huge omnibus bills are cobbled together, loaded with pork that might not pass if they were considered on their own merits. Perhaps we could get congressional rules changed so that every spending bill is considered separately, with only relevant amendments allowed. That would create more transparency. As things stand now, only a handful of staffers and lobbyists are likely to know what is in these monster bills.

#### WhoWee

One reason for our excessive spending IMO is that huge omnibus bills are cobbled together, loaded with pork that might not pass if they were considered on their own merits. Perhaps we could get congressional rules changed so that every spending bill is considered separately, with only relevant amendments allowed. That would create more transparency. As things stand now, only a handful of staffers and lobbyists are likely to know what is in these monster bills.
I agree - smaller focused Bills would expose waste and drive accountability on every level.

#### Al68

Memic is the state's worker's comp provider.
Seriously, that explains a lot.
The playing field is highly skewed in favor of Memic, despite the claims from the right that our state's laws are "anti-business".
Could it be that the businesses the right was referring to are not those businesses in bed with the state, getting their business from the state, like Memic? :uhh:

#### turbo

Gold Member
Seriously, that explains a lot.
You don't know the back-story. My uncle and other business-owners in the forest-products industry in this region banded together to self-insure for workers comp. When you have a lot of guys out in the woods with chain-saws, cable skidders, etc, there is potential for some serious injury, and the comp coverage available was too expensive. My uncle and his partners found out that self-insurance not only saved them money, the premiums that they paid to their consortium earned them some serious interest, since they were quite cognizant of worker safety and kept injuries as low as possible. Get caught running a chain-saw without cut-resistant chaps, gloves, helmet with face-shield, etc? Down the road you go.

Enter the state insurance board, which in its "wisdom" decreed that such self-insurance plans had to be dissolved, putting those business owners at the mercy of the costly insurance market, which already had deemed the logging and forest-product trucking industries to be high-risk. The big insurance companies and their lackeys in Augusta win again. In this case, the state was anti-business for real. Just anti-modest-sized entrepreneurial businesses. The insurance giants made out just fine, thank you.

#### Al68

You don't know the back-story.....Enter the state insurance board, which in its "wisdom" decreed that such self-insurance plans had to be dissolved, putting those business owners at the mercy of the costly insurance market, which already had deemed the logging and forest-product trucking industries to be high-risk. The big insurance companies and their lackeys in Augusta win again. In this case, the state was anti-business for real. Just anti-modest-sized entrepreneurial businesses. The insurance giants made out just fine, thank you.
That was my point. The anti-business nature of the state's laws referred to by the right are clearly not referring to businesses in bed with the state, that benefit from such policies.

They're talking about private businesses that want only to be left alone by the state, not businesses that profit from state intervention in the economy.

#### mege

That was my point. The anti-business nature of the state's laws referred to by the right are clearly not referring to businesses in bed with the state, that benefit from such policies.

They're talking about private businesses that want only to be left alone by the state, not businesses that profit from state intervention in the economy.
As an aside - this is exactly part of why the Affordable Care Act scares me - the insurance companies are for it.

One reason for our excessive spending IMO is that huge omnibus bills are cobbled together, loaded with pork that might not pass if they were considered on their own merits. Perhaps we could get congressional rules changed so that every spending bill is considered separately, with only relevant amendments allowed. That would create more transparency. As things stand now, only a handful of staffers and lobbyists are likely to know what is in these monster bills.
I would go one step further that each bill needs to have a neccessary end date and be reinstituted (think about how they implemented the PATRIOT Act). Shouldn't policies be placed in mind to solve something? (solving indicating a resolution) Too many bills become self-serving loads on the government's books because noone has the heart to say 'wait, why do we still need this?' The way bills are passed now, force politicing and don't have long term goals in mind other than 'solve right now!'

#### Al68

As an aside - this is exactly part of why the Affordable Care Act scares me - the insurance companies are for it
Yes, plus the name. A general rule of thumb is that the name of a law promoted by the left tends to be the opposite of its contents. The use of the word "reform" always means it's the epitome of corruption. So of course they're going to put the word "affordable" in the name of a law that does the opposite. Just to be sarcastic and rub it in, you know.

#### WhoWee

IMO, the only way to effectively cut our deficit is to cut spending ASAP and to keep all future spending on-budget and transparent.

We can get rid of a lot of spending with a few moves. First, close at least 600 foreign military bases. They are not necessary to the security of our country. Foreign bases are a drain on our treasury and a direct monetary transfer to the countries that host those bases. Bring home the military personnel, administrators, and their families. We will all be better off.

Next, drop a couple of carrier groups. Our Navy does not need to be able to project aggression all over the world. No other country has this force.

Next, drop the support for ethanol, and all other price-supports for agricultural programs that steer so many millions of dollars to ADM, Monsanto, etc, while making basic foods more expensive for US citizens.

This is not an inclusive list. I hope others can chime in.

The GOP fantasy that we must attack deficits by cutting Medicare, Medicaid, and Social Security, is just that. A fantasy that cannot work while keeping our most vulnerable citizens covered by at least a minimum social net.
I think we can all agree there are basically 2 ways to cut spending - immediately or in phases.

With that said, it might be wise to engage in a policy of non-renewal or non-replace whenever possible?

As for the "GOP fantasy that we must attack deficits by cutting Medicare, Medicaid, and Social Security" - how can we not make cuts and other adjustments somewhere in these areas? As the economy tanked, Medicaid has been expanded very rapidly over the past few years - does anyone think this expansion is sustainable at the state level?

#### turbo

Gold Member
As for the "GOP fantasy that we must attack deficits by cutting Medicare, Medicaid, and Social Security" - how can we not make cuts and other adjustments somewhere in these areas? As the economy tanked, Medicaid has been expanded very rapidly over the past few years - does anyone think this expansion is sustainable at the state level?
SS is self-sustaining, and can continue to be so for many decades. Just lift the cap on earnings.

Medicaid and Medicare costs are increasing not because the programs are broken and need to be slashed, but because of our out-of-control health-care costs. Health insurance is far too expensive in the US. Other industrialized countries do not pay anywhere what we have to in order to get coverage for their citizens. Institute a true public option, perhaps by allowing younger, healthier workers to opt in to Medicare.

#### WhoWee

SS is self-sustaining, and can continue to be so for many decades. Just lift the cap on earnings.

Medicaid and Medicare costs are increasing not because the programs are broken and need to be slashed, but because of our out-of-control health-care costs. Health insurance is far too expensive in the US. Other industrialized countries do not pay anywhere what we have to in order to get coverage for their citizens. Institute a true public option, perhaps by allowing younger, healthier workers to opt in to Medicare.
IMO - as we speak, Social Security is under attack from the "generosity" of our politicians. We've discussed this previously:

Medicaid costs are increasing because the program is expanding - and it's putting a great deal of stress on the states. Isn't Medicare 100% under the control of Government already?

#### WhoWee

This sums up the problem - IMO.

http://www.usatoday.com/news/washington/2011-06-06-us-owes-62-trillion-in-debt_n.htm

"The government added $5.3 trillion in new financial obligations in 2010, largely for retirement programs such as Medicare and Social Security. That brings to a record$61.6 trillion the total of financial promises not paid for.
This gap between spending commitments and revenue last year equals more than one-third of the nation's gross domestic product.
Medicare alone took on $1.8 trillion in new liabilities, more than the record deficit prompting heated debate between Congress and the White House over lifting the debt ceiling. STORY: Government's mountain of debt Social Security added$1.4 trillion in obligations, partly reflecting longer life expectancies. Federal and military retirement programs added more to the financial hole, too.
Corporations would be required to count these new liabilities when they are taken on — and report a big loss to shareholders. Unlike businesses, however, Congress postpones recording spending commitments until it writes a check.
The $61.6 trillion in unfunded obligations amounts to$527,000 per household."

#### Al68

"The government added $5.3 trillion in new financial obligations in 2010, largely for retirement programs such as Medicare and Social Security. That brings to a record$61.6 trillion the total of financial promises not paid for.
Does anyone really think our children and grandchildren should assume such a debt, when they made no such promise? A debt of over $500,000.00 per household? Are they really expected to buy the argument that they owe that debt on the basis that they will in return receive a promise that their children and grandchildren will assume a debt to them in return? Only complete sheep would buy such a Ponzi scheme argument and assume a debt they do not in fact owe. And the amount is far beyond what even the sheepiest of socialist Ponzi drones could assume even if they wanted to. There are only three alternatives: massive changes to the Ponzi schemes in question, abandonment of the Ponzi schemes in question, or collapse of the federal government. At this point, if so many people have such a narrow and delusional worldview as to consider the Ryan plan "far right", that last option seems inevitable. That's the normal fate of Ponzi schemes, anyway, and a federal government could be re-instated sans unconstitutional Ponzi schemes. #### WhoWee Does anyone really think our children and grandchildren should assume such a debt, when they made no such promise? A debt of over$500,000.00 per household?

Are they really expected to buy the argument that they owe that debt on the basis that they will in return receive a promise that their children and grandchildren will assume a debt to them in return? Only complete sheep would buy such a Ponzi scheme argument and assume a debt they do not in fact owe. And the amount is far beyond what even the sheepiest of socialist Ponzi drones could assume even if they wanted to.

There are only three alternatives: massive changes to the Ponzi schemes in question, abandonment of the Ponzi schemes in question, or collapse of the federal government.

At this point, if so many people have such a narrow and delusional worldview as to consider the Ryan plan "far right", that last option seems inevitable. That's the normal fate of Ponzi schemes, anyway, and a federal government could be re-instated sans unconstitutional Ponzi schemes.
my bold

Is it any wonder the Left hates Glen Beck?

http://www.foxnews.com/story/0,2933,542521,00.html
"BECK (voice-over): The Cloward-Piven strategy in a nutshell.
Left-wing radicals Richard Cloward and Frances Fox Piven advance their strategy to end poverty in a May 2, 1966 article in The Nation.
Cloward-Piven starts with the idea that there is a wide gap between the entitlements that poor people are eligible for and the entitlements that they are actually collecting. They say getting everybody on to the welfare rolls will wipe out poverty and the only way to accomplish that is through a massive multi-city education campaign making heavy use of the media.

So, once the poor know that they're eligible and start to sign up, what happens next? In their own words, "a crisis." A crisis that starts in the cities that would rapidly spread to a nationwide level and force the government to move quickly to create a new program for direct income distribution: Marxism.
Wait a minute — community organizations overwhelming the system that would lead to a massive redistribution of wealth? Gee, where have I heard that before?
That's Cloward-Piven strategy in a nutshell."

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#### Zarqon

One the one hand I can see how all this extra spending lead to economic issues, but on the other hand I just don't get how our society can "run out of money" to provide a good life for everyone when we're so much more efficient at producing stuff than every before in our history.

Compared to let's say 100 years ago, our capability for producing things like food and houses are vastly superior. For example, even in the face of a increasing life expectancy, and thus more older people to care for, how can we not have become so much more efficient that it is a a simple matter to provide all basic needs to these people?

What in the society is eating up all the efficiency we have developed over the last century?

#### mege

What in the society is eating up all the efficiency we have developed over the last century?
http://en.wikipedia.org/wiki/File:United_States_Capitol_-_west_front.jpg" [Broken]

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#### WhoWee

1.) K-12 schools have a break in the summer. The tradition began when children were needed in years gone by to help on the family farm. Now it seems the tradition continues to facilitate family vacations.

2.) Lower income families are typically eligible for food assistance and there are in-school "free lunch" (and/or breakfast) programs in many schools.

IMO - both of those programs are needed. (Although, I would like to see the purchasing addressed - another conversation.)

However, this program does not make sense to me:
http://www.ode.state.oh.us/GD/Templates/Pages/ODE/ODEPrimary.aspx?page=2&TopicRelationID=835 [Broken]

"Just as learning does not end when school lets out, neither does a child's need for good nutrition end. The Summer Food Service Program (SFSP) provides free, nutritious meals and snacks to help children in low-income areas get the nutrition they need to learn, play and grow throughout the summer months when they are out of school.
The SFSP was created to ensure that children in low-income areas can continue to receive nutritious meals during long school vacations when they do not have access to school lunches or breakfasts. But, although millions of children depend on nutritious, free and reduced-price meals and snacks at schools during nine months of the year, just a fraction of that number receive the free meals provided by the SFSP during the summer months."

Why is this necessary? Where is parental responsibility?

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#### mege

IMO - both of those programs are needed. (Although, I would like to see the purchasing addressed - another conversation.)
Purchasing? Did I miss part of the conversation? :p

Why is this necessary? Where is parental responsibility?
IMO this is one of the worst side-effects of any nanny-policy, the waning of responsibilities. And of course is one of the key arguements for free market principles - individuals taking responsibility for themselves are stronger than those that do not take responsibility for themselves. One of my biggest issues with these types of policies is they're band-aids - there is no attempt to actually RESOLVE the impoverishment. We don't need safety nets, we need safety trampolenes.

#### Al68

IMO this is one of the worst side-effects of any nanny-policy, the waning of responsibilities. And of course is one of the key arguements for free market principles - individuals taking responsibility for themselves are stronger than those that do not take responsibility for themselves. One of my biggest issues with these types of policies is they're band-aids - there is no attempt to actually RESOLVE the impoverishment.
That's a key point. It's obvious from the design of the programs advocated by the left, and simple political logic, that resolving the problem is not the goal. Their permanent solution is the perpetuation of the problem, and the perpetuation of their "band-aid" policies.

And like any group of mobsters, it's hopeless to try to sway them with reason and logic. To paraphrase Ben Franklin: Force poops on the back of reason. We will never change the minds of the power hungry.

Of course they have gotten so greedy the last couple of years that their system will likely crash. And they will predictably try to blame those they pillage from instead of their pillaging, just like they do now.

#### WhoWee

Purchasing? Did I miss part of the conversation? :p
I don't want to divert this thread. In other threads, I've noted the purchasing power the Government would have if they bought generic staples and paid distributors on a cost plus basis - rather than allow consumers to pay retail for processed foods of their choice - again, IMO - poverty is too comfortable.

#### talk2glenn

Medicaid and Medicare costs are increasing not because the programs are broken and need to be slashed, but because of our out-of-control health-care costs. Health insurance is far too expensive in the US. Other industrialized countries do not pay anywhere what we have to in order to get coverage for their citizens. Institute a true public option, perhaps by allowing younger, healthier workers to opt in to Medicare.
What does this even mean?

Currently, the Department of Health decides how much to reimburse providers for procedures performed under Medicare. These rates are already significantly below the going market rate - so much so, that the system suffers from provider flight. Your argument is that these costs are still too high. If so, the Medicare advisory board already has the authority to negotiate lower reimbursement rates - why don't they?

Because, of course, reimbursement rates aren't "too high"; in fact, they're too low, from the markets perspective. Other industrial countries pay less because they use non-price determinants of supply; specifically, they make do with less access (first-come first-serve rationing rather than price-rationing) and fewer procedures (the most expensive treatments are priced out of the market and totally unavailable outside the United States). This is less of an option here because the government must compete with private consumers for access to providers - something illegal in places like England and Canada (though I think Canada is flirting with privatization).

So, you've got two options:

Nationalization, so that the government becomes a monopsonist (the sole consumer of the good). It can dictate lower prices to providers (they won't be able to simply turn away the government pool and service a private pool). Many providers will be priced out of the market, reducing the supply and resulting in lengthy wait times for access (or eliminating access altogether, if reimbursement rates won't cover operating costs at even the most efficient firms for the most exotic procedures). This is the British model.

Privatization. Reduce the benefits provided by the Medicare program, and encourage customers to supplement with private coverage, or pay out of pocket. So, for example, Medicare might provide catastrophic coverage, with routine, long-term, maintenance and prescription coverage obtained privately or on a for-cash basis. This is the Ryan model.

In neither case is the existing model sustainable, let alone expandable. Note also, before pushing for the former, that the vast majority of healthcare innovation occures in the United States. Routine access to new procedures becomes commonplace in foreign markets only years after procedure introduction here, when costs have fallen to workable levels, given the lower international reimbursement schedules. It is possible that healthcare innovation would mostly stop if the incentive to innovate - a rich and willing to pay American market - were eliminated.

#### CAC1001

On the issue of servicing the national debt, I think it was mentioned earlier that we are at a double-digit percentage of the budget being used to pay for servicing the debt. However, this is incorrect, the percentage of the federal budget used to service the debt is still in single digits, however, we are at a double-digit percentage of the federal revenues being used to service the debt. Right now, it's about 13% of the federal revenues, which is a red flag. If it gets up to 18% or over, that is a major red flag that can cause a downgrade to the bonds.

On the issue of the entities that buy U.S. debt being willing to buy it at very low rates right now, what happens if the interest rate has to increase? With a moderately-size level of national debt, this isn't a problem, but with a massive level of national debt, this can create a huge problem, because at that point, even an uptick in the interest rate of one percentage point could mean a massive increase in the amount of money it takes to service the debt. In other words, we could go from 13% of the federal revenues to 18% or higher being used to service the debt really quickly. Japan for example has a national debt that is 230% of their GDP. They have a AA bond rating. Their national debt is so high that if they were to increase their interest rate by one percentage point, it would wipe out whole sections of the Japanese government. Probably one way in which Japan is able to get around this is that they hold 90% of their debt.

On making Social Security more solvent by raising the cap on income taxed, the argument against this is that it would turn SS into a de-facto welfare program. SS is (or was) "supposed" to be a program in which you get paid out what you paid in. So you cap how much income is taxed, because otherwise the guy making $500,000 a year would end up getting massive payouts from SS while the person who made$30,000 a year wouldget much smaller payouts, which would lead to a lot of populist screaming. If you make the higher-earners pay into SS but only get a tiny amount paid out, if anything at all even, it is now a welfare program. One thing that could be done for SS is to raise the retirement age a bit more.

On the issue of a minimum wage, you raise the minimum wage too high, and you'll hike up the unemployment rate. I have actually wondered how the unemployment rate currently would respond if both the national and all state-level minimum wages were suspended for a couple of years. One of the first things the Democrats did under Nancy Pelosi upon taking control of the Congress in 2006 was to vote in an increase in the minimum wage. A healthy economy could maybe withstand that (although we had around 5% unemployment under Bush, at the limit for being considered full employment), but with it having been increased and then with the real-estate industry crashing, and then the financial crisis in 2008, I'd imagine the higher minimum wage is probably keeping unemployment higher than what it otherwise might be as the economy is very sensitive.

As for cutting spending, on the issue of waste and corruption, a problem with much of that is you just can't cut it, because it's like the marbling in a steak (marbling is the fat webbed throughout the meat). If there are big pieces of fat on the ends of the steak, you can take a knife and just cut them off, but it's pretty impossible to cut out the fat webbed throughout the meat, and that is how a lot of the corruption that occurs in the government is.

#### WhoWee

IMO, the only way to effectively cut our deficit is to cut spending ASAP and to keep all future spending on-budget and transparent.

We can get rid of a lot of spending with a few moves. First, close at least 600 foreign military bases. They are not necessary to the security of our country. Foreign bases are a drain on our treasury and a direct monetary transfer to the countries that host those bases. Bring home the military personnel, administrators, and their families. We will all be better off.

Next, drop a couple of carrier groups. Our Navy does not need to be able to project aggression all over the world. No other country has this force.

Next, drop the support for ethanol, and all other price-supports for agricultural programs that steer so many millions of dollars to ADM, Monsanto, etc, while making basic foods more expensive for US citizens.

This is not an inclusive list. I hope others can chime in.

The GOP fantasy that we must attack deficits by cutting Medicare, Medicaid, and Social Security, is just that. A fantasy that cannot work while keeping our most vulnerable citizens covered by at least a minimum social net.
To re-address the OP - I'm in favor of a phased-in percentage reduction across the board starting now with a goal of paying down the national debt over 40 years - perhaps to a 90 day working capital limit. If the budget cut is 20% or 30% - let the administrators of the specific departments sort out the details.

IMO - when Government has a lean budget - waste will become quite obvious and any cuts in service favored over cuts in staff (Government size) will also be obvious.

#### Char. Limit

Gold Member
The http://www.cnn.com/2011/US/06/02/georgia.immigration.farm.workers/index.html?iref=allsearch" there are several states in the mid-$8 range. The article must be mistaken, but that's where I got my number. Is that before taxes or after taxes? I specifically mentioned "taking home"$7.80 an hour.

Current binary employment issues aside, my point is that actual take-home isn't the issue for those that are working full time. Working 50 hours at a mill or farm isn't out of the ordinary - unskilled labor for road construction, county crews, etc, generally pay much higher (esspecially for unionized employees). The problem is really WHAT jobs people are doing. It's easy to be willing to work at WalMart or Target, and you're getting paid accordingly - lots of people love retail jobs because of the extreme flexability and possible discouts/perks. It's also a job that can be done by someone with on the job training, making these jobs also good for young folks in college or just starting out. The retail environment is sketchy for the employer - you cannot give all of their staff full time hours. I was a supervisor at a big box store for about 2 years - out of 25 employees in my department during christmas, I had 3 that were full time. 6-8 each day during the week and everyone on Saturday and Sunday. In the non-holiday times that scaled down to a total of 8 with 2 full time. 3 per day during the week, and again, everyone on the weekends. How can I employ more people - the business couldn't handle it? Mandating that a company has x% full-time employees is lunacy and will spell doom for the retail industry - or prices will neccessarilly go up accordingly.
Ah, I see what you mean now. See, explanations are good. They help me understand things.

One could argue that the issues that General Motors faced in the past decade were because of their generous hiring practices. As a rule through the 60s and 70s, GM didn't hire temporary workers, it didn't hire part time workers - it didn't need to. It could afford the inefficiencies with the excuse that they had a huge available talent pool (ever heard the phrase 'Generous Motors'?). As their market share shrunk through the 80s and into the 90s they had to start cutting chaff and become more lean and mobile. They voluntarilly chose to be a respite, of sorts, for the community and had very loose hiring standards and practices - but that ended up biting them in the rear. Now, except for some highly specialized engineering positions, they're not hiring for permanent positions and they've started contracting more temps than ever. They got bit by the excess on their employee's behalf.

Finally, and I generally avoid any ad hominem discussions - but if you're only working 20 hours/week, that's your own fault. There may not be jobs you want to do out there to make minimum wage or better with full time hours, but they are out there. I've always had a job where I was getting 40+ hours. For the first time, come this spring, in almost 10 years I will not have a full time job (by my own choosing, to focus on school). I've jumped between jobs as I've moved around, but a month or two of unemployement aside - I've worked 40-60hrs/week for a decade. Most have been indoor desk or retail jobs, but some of the best paying jobs I've had were labor (I did road construction for 3 summers between my first stint at college). Most of that time was spent living in the Detroit area... so arguebly an area that has been worse for longer as far as employement has concerned. Point being - jobs are there, it just may not be precicely what you want to do.
I'm just going to ignore this part; I don't want to get into a flame war right now. Allow me just to mention that it's a trifle difficult to work 40+ hours a week and still manage to get 15-18 hours of class and 45-54 hours of studying in, per week. And still have time to sleep.

And before you say anything, yes it took me this long to get back to you.

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#### mege

I'm just going to ignore this part; I don't want to get into a flame war right now. Allow me just to mention that it's a trifle difficult to work 40+ hours a week and still manage to get 15-18 hours of class and 45-54 hours of studying in, per week. And still have time to sleep.

And before you say anything, yes it took me this long to get back to you.
Then you have extra circumstances that prevent you from working 40+hrs/week. That's a different situation than jobs being available for someone looking for a career to live off of.

I moved a year ago and it took me 3-4 job interviews and offers before I found one compatable with going back to school. I eventually did find something compatable (I work nights doing server-watching which gives me a lot of homework time!). I was close to giving up my search for a fulltime job and accepting part time somewhere for the flexability, but I consider myself lucky.

#### Char. Limit

Gold Member
Then you have extra circumstances that prevent you from working 40+hrs/week. That's a different situation than jobs being available for someone looking for a career to live off of.

I moved a year ago and it took me 3-4 job interviews and offers before I found one compatable with going back to school. I eventually did find something compatable (I work nights doing server-watching which gives me a lot of homework time!). I was close to giving up my search for a fulltime job and accepting part time somewhere for the flexability, but I consider myself lucky.
Hmm, that actually sounds pretty interesting (and useful). Nice catch!