Bob/PKB
Pretty Understandable To Me...
This is one of the best explanations of this country's economic condition I ever received, which is why I'm sending it out to you. Since I like simple explanations, perhaps you, too, will appreciate it as I did.
Lesson # 1:
* 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 cuts: $38,500,000,000
Let's 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 the credit card: $142,710
* Family decides to cut budget by: $385
Got it so far?
Lesson # 2:
Here's another way to look at the Debt Ceiling:
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 ceilings, or pump out the crap?
Your choice is coming Nov. 2012.
7 Answers
daren1
Stop foreign aid ..plain and simple..
| 12 years ago. Rating: 10 | |
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ed shank
jhharlan
digger
Excellent simplification, but far from being truly analogous. There is a major difference between household budgets and government budgets. In the case of the former, the two key components, revenue (income) and expenses are virtually mutually exclusive and are not impacted by one another. Cutting household expenses has no bearing on the household revenue. This makes it relatively easy to balance the family budget. Just spend less, while keeping your revenue (job) and you're on you're way. Conversely, increasing household revenue, ( get a raise or a second job) doesn't mean you need to simultaneously increase your expenses.
In the case of government budgets, cutting expenses almost inevitably affects the revenue side of the ledger. Whether you cut spending in the military, infrastructure or just about any other program, you are going to get a drop in revenue in the form of lost taxation caused by employment cuts, be they direct or indirect. This means that cutting 1.65 trillion $ from the budget (in the hope of balancing the budget) will not suffice because the consequences of such a massive slash would adversely affect the result in taxation revenue income. Balancing the budget by relying solely on expenditure cuts likely means that the magic number is more like 2.5 trillion in cuts. An impossible number to attain in one swipe.
Getting back to the family household, every member of the family would likely agree that overspending $16,500 each year has to stop. Now try getting each member to agree on WHAT to cut. Mission impossible.
| 12 years ago. Rating: 7 | |
Yes, though, on agreeing what to cut. If my son and his GF smoke 1 less cigarette each per day, they will buy 3 packs less cigarettes each month, saving nearly $20, which could take them to a movie, simple dinner, family trip to the zoo, etc etc. etc.
lindilou
mycatsmom
