United States 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 cut: $38,500,000,000
Now, remove 8 zeros and pretend it’s a household budget.
Annual family income: $21,700
Money the family spent: $38,200
New debt on the credit card: $16,500
Outstanding balance on credit card: $142,710
Total budget cuts: $385
Sort brings the issue “home” doesn’t it?
(I’m not sure who first wrote this, but thanks to Richard Lewis of Wells Fargo Advisors in Racine Wisconsin for passing it along.)
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8 Comments on “The United States Budget, Plain English”
I’m laughing at the media for falling for a $385 cut, from a $142,710 “credit card” debt!
But then, I’m crying – because this “scam” is only going to cause more pain for all of us.
In response to an earlier comment: “the only asset is the ability of the government to use its force-monopoly to force people to pay taxes.” I would submit that even that “asset” is questionnable, in a system where a greater and greater percentage of the citizenry is allowed to slack off on welfare, producing nothing, and refusing to work at all. (This of course, does not include the small percentage of disabled, mentally insufficient, or others who are legitimately unable to work.)
It’s amazing how confusing it all is, when you look at the actual, big numbers. But then your excellent simplification of just reducing the numbers to something we see in our normal lives, makes it all so clear. Nicely done.
Perry, plain english indeed!
I wish someone could place a list like this in front of the voters before they vote, so they might stop putting people in Washington who only add to this already ludicrous debt!
My God. Perry, this very short post by you, brilliantly brings home the point, succinctly.
And you’re so right, that the politicians have figured out we can be bribed – with OUR money!
:(
Governments and households are very very different.
If you wanted to equate government spending on infrastructure and job creation to something in the normal household economy, it would be more like taking out a loan to earn a Master’s Degree or start a Small Business.
These are investments that pay back. I think the success of Keynesian Economics throughout the middle of this century prove that. We had a great economy from Truman up until right before the second Bush presidency thanks to a more pro-active government than we have now.
Any supposed recent “growth” in government recently is only because GDP has dropped. And that’s because the banks are using the Federal reserve to effectively print themselves money without re-investing it in the economy.
The banks essentially stealing from the public by taking out practically free loans from the government and then using it to buy government bonds at a higher interest rate! It’s pretty crazy right now. It’s a real scam, and in large part, the cause of our budget problems. Private organizations are effectively trying to bankrupt Democratic government.
Because of it, we all suffer.
This shows the whole insanity of how most politicians handle money.
And it’s quite similar here in Europe.
What’s additionally scary is, that government debt is the only debt that is not secured by assets.
(or the only asset is the ability of the government to use its force-monopoly to force people to pay taxes. That’s also a kind of asset. But a very questionable asset from a moral point of view.)
Therefore, government debt is the only debt that can really cause a runaway inflation.
All private debt is secured by real hard assets. That is, the money created by that debt is backed by real assets -> no danger of inflation if the central bank does its job even only halfway well.
Ever wondered why governments are the only big money-handling institutions who do not have a balance sheet?
They use quite different schemes of “bookkeeping”.
If they used a balance sheet, they either would clearly be bankrupt, or they would have to list “their ability to force collection of taxes” as an asset.
And that would be too honest, i.e., more people would see the insanity of that system.
Very smart comments.
Alexis de Tocqueville, the famous French political analyst, said in 1835 that the American political system would work just fine until the politicians figured out they could bribe the people with their own money.