Monday, September 12, 2011

U.S. Budget on Drugs

Just an interesting tidbit I wanted to share regarding the U.S. budget and deficit.  The U.S. Congress sets a federal budget every year in the trillions of dollars. Few people know how much money that is so here is 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 (approximately $2.2 trillion)

Federal budget: $3,820,000,000,000 (approximately $3.8 trillion)

New debt: $ 1,650,000,000,000 ($1.65 trillion)

National debt: $14,271,000,000,000 (approximately $14.3 trillion and rising)

Recent budget cut: $ 38,500,000,000 ($38.5 billion or about 1 percent of the budget)

It helps to think about these numbers in terms that we can relate to. Therefore, 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: $21,700s

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: $385

Thought this was an interesting way to explain how the U.S. budget cuts.  By comparing it to a family budget, you can see how ridiculous the budget cuts really are.  If you had $143,000 on your credit card, do you think the bank would increase your credit limit another $16,500 especially if you are spending more than you make and you only promise to reduce spending by $385 a year?  If you ran your household like the U.S. government, you would be filing for bankruptcy.  Oops! I said it.  The U.S. government is bankrupt.  How does the government do it then?  By printing money and devaluing the dollar.  Basically, it is coming out of your pocket in the way of purchasing power.  And in the future it will come out of your pocket and your children's pockets and your grandchildren's pockets in the way of taxes.    :(

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