Friday, January 04, 2013

US Budget Balance

The US debt crisis, brilliantly explained, in two brief lessons.


Lesson # 1:

* U.S. Tax revenue: $ 2,170,000,000,000
* Fed budget: $ 3,820,000,000,000
* New debt: $ 1,650,000,000,000
* National debt: $14,271,000,000,000
* Recent budget cuts: $ 38,500,000,000

Let's now remove 8 zeros and pretend it's a household budget:

Annual family income: $ 21,700.
Family expenditure on
credit cards: $ 38,200.
New debt on the
credit card: $ 16,500.
Outstanding balance
on the credit card: $ 142,710.
Total cuts in the
family budget so far: $ 3.85

Got It ?????

OK now,

Lesson # 2: Here's another way to look at the Debt Ceiling:

Let's say, you come home from work and find there has been a sewer backup in your neighborhood...and your home has sewage all the way up to your ceilings.

What do you think you should do ......
raise the ceiling, or remove the shit?


Charlie Hubbard said...

Is spending more $$ than we have a problem? Well?
Lots of ideas on how to fix our budget problem - lots of blame to go around. Any elected official who does not first admit spending money we 'do not have' is something that must stop (or never should have started) has a credibility problem.
Don't talk about your solutions until you first identify 'the problem'
I must add no bigger problem than the main street press on this item - truly sad.
As Ronald Reagan once said 'there must be a pony aroung here because there is horses##t all over the place' - he was refering to some politicians and the press who backed them up.

Anonymous said...

The mathematic reality is easy to complain about. What's harder is deciding what to cut. Have at it.

Anonymous said...

Chalie like the billion a week to continue the 10 year Bush- Chaney wars in Iraq and Afghanistan right? Your remarks about Reagan is moot because he would have never got us into into those illegal wars in Iraq in the first place What escapes this Internet BS is that Bush inherited a deficit surplus from Clinton. It took him 8 years to to spend money we didn't have and put us where this country finds itself as was pointed out in the original posting.

Anonymous said...

You forgot the third leg...raise income. If we as a country decide the expenses are all worthwhile, then we need to raise the income to cover them.

Anonymous said...

The math is off on the cuts to the family budget... should be $38.50, not $3.85.

For the message in a pictorial representation, look here:

The reasons for looking at fed+state+local are at least two: (1) it makes comparisons to other countries easier, where different countries have different splits of responsibility between the layers of government, and (2) much state spending is driven by federal mandates anyway, so it is in a sense federal spending by proxy.

Bottom line: debt was elevated but stable(ish) for 20 or so years prior to 2007, when it took off like a rocket. The key change was not in the White House (people always blame presidents, but it's not always their fault) but in Congress, where in January 2007 we swore in mega-majorities unlike any that we had seen for either party in a long time. We voted for change and boy did we get it.

To those who want to "raise income", two questions: (1) Is the amount of tax revenue currently seized from the American people too little to run a respectable government? (2) Is there any moral, ethical, legal, or professional difference from the government's point of view between raising taxes and reducing spending?

The answer to the first, I submit, is "Of course $5.6 trillion per year is enough to run a government". Even totalitarian states run their very intrusive governments for much less.

The answer to the second is "yes, of course". The government has a fiduciary duty and obligation toward the citizens to govern prudently and manage resources wisely, to take no more in taxes than is needed to perform those functions of government that outweigh the inherent injustice of taxation.

Charlie Hubbard said...

to 6:40 (anonymous)
You say it's the war - fine
You say it's Bush's fault - fine
As I said in my posting theres plenty of blame to go around.
What you have NOT done is answer my question - is it ok to spend more $$ than we have?

PS; Do your homework - when Clinton left there may not have been a deficit (debatable) but there was a hugh debt as a result of ??? yes spending money we did not have.

SCATS said...

And when Clinton left office the stock market had already taken a considerable dive the previous several months.

Anonymous said...

Charlie nothing debatable about it. It was a undeniable fact. Bush never saw a spending bill he didn't like thus no vetoes what so ever. That did not set well with the conservative faction of the republican . I repeat place the blame where it belongs not the media as you suggest? Congress is in charge of the national check book. The president has the power of the veto. The buck stops there.

Anonymous said...

Also 6:40, if you were to use truth instead of fiction you might want to read up on the "surplus" myth.

Charlie Hubbard said...

to 3:04 (anonymous)
Perhaps at some point you will answer the question. Phony finger pointing does little and as I said there is plenty of blame to go around.
I did come across a quote from Thomas Jefferson that may interest you.
'I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them'.