Letters from the Lunar Outpost

Sunsets are so beautiful that they almost seem as if we were looking through the gates of Heaven.
- Lubbock, English Statesman, Banker, and Naturalist (1834-1913)

The Federal budget explained in terms of a family budget.

Here are the current numbers on the U.S. Federal Budget:

* United States Tax revenue:  $2,312,600,000,000
* Federal budget:             $3,616,300,000,000
* New debt:                   $1,303,700,000,000
* National debt:             $15,128,600,000,000
* Recent budget cuts:            $38,500,000,000

Now, remove 8 zeros then double the numbers to bring it close to the 2009 median household income of $50,221:

* Annual family income:                  $46,252
* Money the family spent:                $72,326
* New debt on the credit card:           $26,074
* Outstanding balance on credit card:   $302,572
* Recent budget cuts:                       $770

When you think of the recent budget battle that almost ground the government to a halt, it really helps put things in perspective: imagine the insanity of a family so completely dysfunctional that they’ve managed to rack up over $300,000 in credit card debt, adding over $26,000 in debt this year alone and yet in debating the ways to cut down on expenses, the entire family almost completely tears itself apart just trying to shave a measly $770 from their spending.

Source: USDebtClock.org and CDN

US Debt Clock as of 2011/12/18

I based this on a post making the rounds a couple days ago, although that one used numbers dating back to April when the national debt at $14.2 trillion, so I updated the numbers, but the premise in removing those 8 zeros – that really does help put things in perspective.

I don’t think the human mind can really wrap itself around the Federal budget and numbers with that many zeros, numbers in the billions and trillions, but you scale those numbers down to the numbers of a modest household budget and then it becomes very clear just how insane things have become in Washington, D.C.

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5 Responses to If the Federal Budget Was a Family Budget

  • Move it 7 zeros instead of 8 and this looks like the numbers reported by most small businesses before they are profitable. Which, does this not provide a more confidence inspiring perspective? Not to mention that a family with income of just 23K is below the poverty line and couldn’t move any money towards earning interest like a family with more than $2.3T in revenue. Can’t forget context. 😉

    And we know that most small businesses never become profitable, and the flailing economy has boiled this over even into larger corporations (as we know all too well. Can we say GM, United Airlines, Lehman Brothers???).

    Labeling the debt in this example “credit card” debt does make the “perspective” sound more provocative and casts a more negative connotation than any other way of putting it. But call it $150K in mortgage debt, auto loans, or student loan debt and it paints a much less negative picture and one more in tune with the debt most families accrue.

    The administration agrees that spending cuts, and eliminating excess is necessary, but increasing revenues not being on the table – in record filibustering fashion – seems asinine and counter productive. Haven’t we tried it the other way?

    And since we are thinking like the really really really business smart GOP, let me ask, what do you do when the cost of production goes up? When getting your product on the shelves and to the consumer goes up, what do you do? My guess is that your prices go up – you shift some of the costs – enough that you stay profitable – onto the consumer. Isn’t that what a tax increase is; shifting the cost of running the arena from which these businesses and wealthy individuals succeed onto them? Doesn’t sound like economic nuclear holocaust to me.

    • Small businesses have about a 60% failure rate over the first five years, so yes, most small businesses never become profitable, but there’s a big difference between a business investment that didn’t pan out and a government engaging in unsustainable spending.

      When you take office in a country’s 233 year of existence and the debt standing at $10.636 trillion and you manage to take that $10 trillion and turn it into $15 trillion in debt in less than three years, you’re putting the entire country straight on course for a Greek-style meltdown.

      And don’t believe the lies the administration and their lackeys spread through a complicit media about “increasing revenues” by sticking it to small businesses and millionaires – though Obama’s call for class warfare helps divide the nation in a way he thinks may help him win re-election, the truth on those “increased revenues” is they’re a drop in the bucket compared to the revenue we need to undo the damage of these record deficits.

      The truth is, only one thing can bring in the increased revenue we need to stop the hemorrhaging and that’s job creation. You’ll never create a healthy environment for job creation by simultaneously demonizing all them evil rich people.

      I think Barack Obama said it best himself, however:

      “The last thing you want to do is raise taxes in the middle of a recession, because that would just suck up, take more demand out of the economy and put businesses in a further hole.”

      • You said, “…there’s a big difference between a business investment that didn’t pan out and a government engaging in unsustainable spending”. I agree totally. Engaging in unsustainable spending is irresponsible and demonstrates that the administration lacks ideas for a strong, lasting economy. Because of this administration, there are employers who are not hiring until this administration is gone. Apple, for example, has over $90 billion in cash reserves. As an aside, I find it incredulous that people snivel about the rich, but worship S Jobs who created innovation after innovation which have improved all of our lives in one fashion or another. I have to wonder if some of these people use critical thought before they speak. B Gates is another affluent member who made using the computer cooool, instead of nerdy. Facebook’s Zuckerberg is another, and there may be an IPO in 2012. (I hope I can get in on that, somehow).

        Returning to that family budget, if I were a member of a family which spent as though there was a money tree in the backyard, I’d run away from home.

        I enjoyed your post!

  • First of all, it is not class warfare to suggest that taking for granted one’s fortuitous lot in life is a s***ty way to exist. It is not demonizing the rich, or penalizing success to ask those of us who are not in recession – and there are those of us who are not (trust me) – to help us get out of it, before their outstanding wealth in the bow of the ship sinks us all nose first.

    Secondly Barack Obama is a millionaire, even without including his federal salary. I have taken issue with the fact that he has not alluded to it more, but I have one time heard him say that “folks like me” meaning those earning over a million dollars should pay more in taxes. Why can’t we go back to a marginal tax rate and capital gains taxes equal to what they were during the last surplus? Or even better yet, lets go back to what those rates were when President God (oops I mean Reagan) was in office.

    And before you accuse me of “buying into anyone’s hype,” let’s get one thing clear, I cringe at the amount I pay in taxes now like any man seeing money go out of the window, but my solution to taxation is to climb higher, to be better, to amass so much wealth that I go and ask the government to tax me more in spite of taxation. Whatever the political landscape, whatever the tax rate there is no limit imposed thereof as it relates to my ambition, work ethic, talents and abilities. What I do is up to me, not up to taxes, which isn’t that a GOP ideal in the first place? Society can’t limit your success. There’s no such thing as discrimination or poor schools as it relates to folks pulling up their boot straps and making it to the top. This is the land of the dream, and no matter what, or whose flavor of complaining is in the way I won’t be stopped from living it!

    And when I get to where I am going I will be able to look back and be satisfied with the fact that I have helped to create the world that I see; a world that is more safe, more ardent and more just, and less ripe for revolting against me for having not hoarded my success and for having not been irreverent about what actually got me to it. To anyone who has a problem with paying their fair share, leave or make more money! Seems simple, and I have felt that way even before I started paying taxes. Taxation cannot be the excuse we go to for lacking the innovative and efficient spirit that fostered the industrial revolution. Marginal tax rates have been highest in our most prosperous times. It’s time to sing a new song.

    Lastly, the fundamental difference as I see it is that the President has been thoughtful in his approach. He has gone so far as to accept the good ideas from his opponents, at least to some degree. However, his opponents have come to adhere to an irrational train of thought meant to stop at nothing short of making this president look bad. And propaganda can’t be blamed for that, there is tape of them saying it, and with no measure of trepidation or remorse.

    There’s no need to even concern myself with why the deficit increased to what it has – this was far more than 3 years in the making, anyone saying otherwise is complicit in whatever happens next. However, we can easily see that the policies of “job creation” (enough with that already) don’t actually result in the creation of any jobs. Name one time in history when job creation was a result of prolonged tax breaks. Or I suppose that the great Patriot President, George W. Bush was a Democrat in GOP clothing; all he did was expand government, while cutting taxes so someone else would have to pay for it. I’m no history major, but I cannot trace one time in history where the tide rising has done anything but sink smaller boats.

    And back to that irrational train of thought that I mentioned earlier, which I have seen employed to take that Obama quote out of context just as you have. Talk about buying into the propaganda. Raising taxes on over 50% of the country or 160M of 300M people would put businesses further in a hole and most overlooked, yet most importantly, decrease demand, which brings me to a point the fiscally savvy and economically ingenious GOP can’t seem to wrap their heads around. There is no job creation without an increase in demand. Cut taxes to zero, zilch, to nil for corporations and for millionaires and they still won’t hire you and me, because those like us won’t have the purchasing power to go out and buy whatever crap their selling. Just like we shouldn’t be buying the crap either side of the aisle is selling, but we should be telling them what to do to do right by us, and that my friend, would come from our heads, no the heads of any political party “leaders.”

  • I would have to say that the family was either bipolar, high on illegal drugs, or was trying to keep up with the neighbors. It’s so outrageous. We owe so much money to China, we may as well make them our 51st state.

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