Explaining Our Debt Problem
Recently, Standard & Poor’s downgraded the United States because of our budget problems. But the figures are awfully hard to comprehend:
- U.S. Tax revenue: $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: $38,500,000,000
To make it easier, let’s remove 8 zeros and pretend it’s a household budget:
- Annual family income: $21,700
- Money the family spent: $38,200
- New debt added onto the credit card: $16,500
- Outstanding balance on the credit card: $142,710
- Total budget cuts: $385
Nice job. Makes things clear. So clear its scary.
It really brings the point home when you consider someone earning less than $22,000 has an outstanding credit card balance of nearly $143,000 — and is adding $16,500 to it annually (plus interest).
As I recall, S&P also pointed to the political system, and in particular, the willingness of certain people to let US default on its debt, as a primary reason for the downgrade.
Obfuscate >verb, make unclear or unintelligible. What elite experts do to confuse the discussion.
Genius >one who makes the obfuscation intelligible.
Thanks John
I like the comparisons to family budgets. It’s a good way to illustrate the impact of budget deficits.
“Poor’s warned earlier this month that there was a 50-fifty possibility of a downgrade, if Congress and President Obama failed to discover a “credible answer to the rising U.S. federal government credit card debt stress.” S&P mentioned it may possibly cut the U.S. rating to AA inside of 90 days. Passing a $ 4 trillion arrangement could avert a downgrade, S&P explained.”
Liberals always have trouble remembering the facts. The fact we didn’t agree on big enough cuts was the problem which was told to us months before.