Letter to the Editor: The family budget-buster
It’s probably fair to say most people, regardless of party affiliation, already know that the USA is in financial trouble. However, it’s still all very difficult to put in perspective with so many zeros on the numbers. By removing some zero’s it becomes pretty clear.
Federal Budget 101
The U.S. Congress sets a federal budget every year in the trillions of dollars. Few people know how much money that is, so we created a breakdown of federal spending in simple terms. Let’s put the 2011 federal budget into perspective:
· U.S. income: $2,170,000,000,000*
· Federal budget: $3,820,000,000,000*
· New debt: $1,650,000,000,000
· National debt: $14,271,000,000,000
· Recent budget cut: $91,700,000,000 (based on news reports, about 1 percent of the budget)
* Wikipedia 2011 U.S. Federal Budget
It helps to think about these numbers in terms that we can relate to. Let’s remove eight zeros from these numbers and pretend this is the household budget for the fictitious Jones family.
· Total annual income for the Jones family: $21,700
· Amount of money the Jones family spent: $38,200
· Amount of new debt added to the credit card: $16,500
· Outstanding balance on the credit card: $142,710
· Amount cut from the budget: $917 (based on news reports of deficit legislation)
So in effect last month Congress, or in this example the Jones family, sat down at the kitchen table and agreed to cut $917 from its annual budget. What family would cut $917 of spending in order to solve $16,500 in deficit spending for the year?
Now, after years of this budget smoke and mirror game, the Jones family has $142,710 of debt on its credit card (which is the equivalent of the national debt). They are in serious trouble but are still managing to make the monthly minimum payment to keep the card active. You would think the Jones family would recognize and address this situation, but it does not. Neither does Congress.
In effect, what we have is a reverse mortgage on the country. The problem is that the voters have become addicted to the money. Moreover, the American voters are still in the denial stage, and do not want to face the possibility of going into rehab.
Congress? Well, I don’t have to explain that to you. Unfortunately, there aren’t enough of them that are smart enough and/or courageous enough to do what needs to be done, regardless of party affiliation. I’m glad I’m on the downhill side of my time on earth, as this can only get worse for our kids and grandkids.